Is FirstEnergy Set to Benefit From Surging Data Center Demand?

FirstEnergy Corp. FE is benefiting from rising electricity demand driven by data center development across its service territories and the broader region, strengthening its long-term growth opportunity. Rising demand from AI-driven facilities is expected to drive higher electricity consumption, expand regulated infrastructure investments and support sustainable earnings growth over time.The company’s West Virginia service territory is witnessing strong interest from hyperscale, with nearly 1.8 gigawatts (GW) of highly credible data center projects already in the pipeline, representing a 50% increase from earlier expectations. The company is advancing negotiations for more than 6 GW of potential load, with nearly 4 GW expected to be contracted soon, providing strong visibility into future demand growth. Its 2035 pipeline demand continues to accelerate, reaching 14.9 GW, up 15% since February 2026. If these projects move forward, they could become a major long-term growth driver for the company through higher electricity sales and infrastructure investment.The company’s Energize365 multi-year grid investment plan modernizes infrastructure, enhances customer experience and maintains competitive electricity rates across its service territory. The company plans to invest $6 billion in 2026 and $36 billion during 2026-2030. FE is investing heavily in grid modernization to accommodate expanding data center demand and facilitate new customer interconnections. Growing AI-driven data center demand enhances FirstEnergy's long-term investment outlook. Expanding electricity consumption should fuel regulated capital investments, strengthen earnings visibility and support sustainable shareholder returns.Data Centers Power the Next Phase of Utility GrowthThe rapid expansion of artificial intelligence and digital infrastructure is making data centers a major growth catalyst for electric utilities. This supports regulated investments, long-term power purchase, revenue visibility and sustainable earnings growth.American Electric AEP benefits from rising AI-driven hyperscale data center power demand. It expects 63 GW of incremental contracted load by 2030, up from 56 GW, with hyperscale data centers expected to represent nearly 90% of the total demand.PPL Corporation PPL benefits from rising AI-driven data center demand. Its Pennsylvania operations have identified 28.3 GW of potential data center demand and approximately 12.9 GW of projected growth in Kentucky through 2032, including more than 11.9 GW from data centers.FE’s Earnings EstimatesThe Zacks Consensus Estimate for 2026 and 2027 EPS indicates a year-over-year increase of 7.45% and 7.57%, respectively.Image Source: Zacks Investment ResearchFE Stock Trading at a PremiumFE is trading at a premium relative to the industry, with a forward 12-month price-to-earnings of 17.1X compared with the industry average of 15.87X.Image Source: Zacks Investment ResearchFE’s Stock Price PerformanceIn the past month, the company’s shares have plunged 6.3% against the industry’s 4.8% growth.Image Source: Zacks Investment ResearchFE’s Zacks RankFE currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Beyond Nvidia: AI's Second Wave Is HereThe AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.See Stocks Now >>This article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks