US electric demand is rising, fueled by everything from data centers to electrified transportation, says BofA.
By 2035, as much as 300 gigawatts of effective capacity could be required to power the nation.
This means upside for five national utility stocks, the bank said.
With resources flooding into infrastructure and tech, US electric demand is charging up. As the economy becomes more power-hungry, Bank of America considers momentum energized for five key utility stocks.
"There is now evidence that demand growth has returned, driven by the re-shoring of industry, the development of data and crypto mining centers and the electrification of buildings, transportation, and infrastructure," analysts wrote on Monday.
Though power consumption has ebbed over the past two decades, the bank anticipates that the US will require 100 gigawatts of effective capacity by 2035. That indicates a 1.5% nationwide annual growth rate, compared to 0.5% between 2015 and 2024.
Under BofA's high-case scenario, however, power demand could require as much as 300 gigawatts instead.
Among factors driving this trend is artificial intelligence. The bank previously cited that this alone could require as much as 28 gigawatts of effective capacity by 2026.
While this will vary dramatically per region, analysts listed five utility firms that stand to benefit from the acceleration: Sempra, Northwestern Energy, Pinnacle West, Entergy, and TXNM.
1. Entergy stands to gain 3.6% from current levels, based on BofA's price objective of $138 per share. That's based on a 2026 sum-of-the-parts analysis and expectations that the utility firm's 15.4-times price-to-earnings ratio will rise over 5%.
In 2024, the electric distributor has soared over 30% year-to-date. It has already played a role in the emerging buildout of AI data centers and has helped expand the power-charging grid for electric vehicles.
2. Sempra will rise 13% based on the bank's $94 share target. Goldman Sachs has similarly touted this infrastructure firm, noting the company's significant spending to support data center growth in Texas.
3. Northwestern Energy could similarly jump over 13% to reach a $65 price target, Bofa says.
"We value NWE at an in-line multiple given improving regulatory treatment in Montana and sector-average EPS growth with no equity dilution, with upside likely occurring in 2026 onwards," analysts wrote. "Between a more constructive regulatory construct and a strong balance sheet, we see NWE as differentiated relative to other small cap utilities."
4. Pinnacle West will climb 4.6% under BofA's price objective of $93 per share. The bank has previously touted PNW among high-quality, value stocks worth owning to hedge against volatility.
5. TXNM Energy is set to increase 10% from current levels, reaching a price target of $48 per share.
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