The utilities sector has outperformed this year, closing its best May since 2003. KeyBanc Capital Markets Equity Research Analyst Sophie Karp and eToro US funding and Options Analyst Bret Kenwell join industry Domination to discuss how to navigate the sector.
Karp says she is bullish on the utility space, claiming that it is “selling the shovels” the AI “gold rush” requires. She also notes that the sector has defensive characteristics because of its non-cyclical nature and underscores the fact that it is historically inexpensive. She adds that utilities are still attractively valued: “The trend is real,” she says, pointing to the strength of power prices.
Kenwell explains that while utility companies may need to make large capital investments to meet the AI-fueled demand coming onto the grid, earnings expectations are still strong for the sector’s leaders.
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