Analysts at UBS reckon surging power needs from AI and data centres are driving a structural investment boom across the utilities sector.
The bank expects annual investment in electricity infrastructure to reach US$3 trillion by 2030, with spending coming across generation, storage, grid upgrades, and data centre support.
US utilities such as PG&E and Vistra are responding with long-term capacity deals and multibillion-dollar grid upgrades.
Menwhile, America's nationwide power demand is forecast to hit record highs in 2025 and 2026, according to the US Energy Information Administration (EIA).
The Swiss bank's analysts believe strong order backlogs and commercial demand support a high-conviction view across electrification stocks.
Valuation premiums are seen as justified, with top stocks forecast to deliver earnings growth 10 percentage points above global averages in 2025, analysts said.
“We retain our high conviction for durable organic growth across the power and resources sector on the back of AI-driven demand, continued electrification, and solid policy support,” UBS added.
In terms of investment strategy, the bank recommended focusing on utilities and infrastructure firms with strong execution records and the flexibility to scale with demand.