September 17, 2026 - The rise of AI data centers is reshaping the Utilities sector. It is weakening the traditional relationship between Treasury yields and Utility valuations and creating a new growth dynamic across the industry. CFRA-covered Utilities could deliver approximately 8.1% five-year EPS CAGR, as surging data-center electricity demand drives higher earnings expectations and changes how investors evaluate the sector.
This report examines how AI-driven power demand is transforming Utility valuations. It explores why the traditional Treasury-yield framework may no longer provide the same valuation signal and why the PEG ratio may offer a more relevant lens for assessing relative value. The report also examines how hyperscaler agreements and expanding data-center load pipelines are creating an uneven transformation across Utilities. Some companies are taking on stronger growth-stock characteristics, while others remain more rate-sensitive.
Get the full analysis of how AI is changing Utility valuations and what it could mean for the sector.