Overall, utility companies are seeing increased demand due to the growth of AI technology and data centers. This has led to opportunities for investors in utility stocks, particularly those with strategic investments in data center infrastructure. Two such stocks highlighted by RBC analyst Shelby Tucker are AES Corporation (AES) and Brookfield Renewable Partners (BEP).
AES is focused on green power generation technology and capacity, with a global footprint spanning the Americas, Europe, and Asia. The company has been expanding its operations to meet the increasing demand from data centers, as well as other sources. Tucker views AES as a leader in the renewable IPP development space and rates the stock as Outperform with a price target of $17, suggesting a 28% upside potential.
Brookfield Renewable Partners operates a portfolio of renewable energy assets, including wind, solar, and hydroelectric power facilities. The company has been rapidly expanding its capacity to meet the growing demand, particularly from the tech sector. Tucker notes BEP’s scale and expansion in the clean energy sector, and rates the stock as Outperform with a price target of $31, indicating a 26% one-year gain potential.
Both AES and BEP have Strong Buy consensus ratings from the Street, with analysts bullish on their growth prospects in the utility sector. Investors looking for opportunities in the utility space may want to consider these stocks as potential investments.