Utility stocks are an affordable way to gain exposure to the artificial intelligence trend and hedge against a slowing economy even after the sector's recent rally, according to Goldman Sachs.
Yet, utility stocks still remain relatively affordable.
Goldman is forecasting above consensus earnings growth of 2% on average in 2026 for the 16 utility stocks it covers.
NextEra , Xcel Energy , Sempra and Southern Company offer the best exposure to the data center power demand surge among Goldman's buy-rated stocks, according to the bank.
"However, a return to a rising bond yield environment could weigh on the performance of utilities," the Goldman analysts said.
Persons:
Goldman Sachs, Goldman, Ryan Hammond
Organizations:
Utilities, Xcel Energy, Sempra, Southern Company, American Electric Power Company, Eversource Energy, FirstEnergy Corp, Federal Reserve, Goldman
Locations:
U.S