BankToons · Markets
Should You Buy Utility Stocks Because of AI?
Should you buy utility stocks because AI needs so much electricity? In October of 2026, Google signed a 20-year deal to buy nuclear power from Constellation Energy, America's biggest nuclear power company. Its stock jumped 12 percent that day, but it was still down about 15 percent since January.
Imagine you run a lemonade stand with a line around the block. The town says lemonade is already too expensive, so it caps your price. And you built your stand with a loan, and now the interest went up. That is where power companies are: electric bills are already high, so their prices are limited, and high interest rates make their loans cost more. The demand is real, but the profit has a ceiling.
Our take: If you own an S&P 500 fund, about 2 percent of it is already power companies. Before buying more on the news, ask if its price is capped, like your lemonade stand.
Every word of the Short
AI needs a lot of electricity. So should you buy power company stocks? In October of 2026, Google signed a 20 year deal to buy nuclear power from Constellation Energy.
Constellation is America's biggest nuclear power company. Its stock jumped 12% that day. But it was still down about 15% since January.
Why? Imagine you run a lemonade stand with a line around the block. Sounds like easy money.
But the town says lemonade is already too expensive, so it caps your price. And you built your stand with a loan, and now the interest went up. That is where power companies are right now.
So, should you buy power stocks because of AI? Not on the headline alone. The demand is real, but the profit has a ceiling.
Here is our take. If you own an S&P 500 fund, about 2% of it is already power companies. Before buying more on the news, ask if its price is capped, like your lemonade stand.
Everyone wants more power, but nobody wants a bigger bill.
