Global AI demand drives utilities gains

Savvy investors have been wagering for years that AI workloads would lift the utilities sector, and that wager has now gone mainstream, Bloomberg reports. The biggest ETF tracking the sector, the Utilities Select Sector SPDR, is up 6.8% so far this year. Utilities — once bought mainly for predictable dividends — are suddenly being treated as AI plays.

Part of what’s driving this is simple rotation. Investors trimming pricey tech stocks still want exposure to AI, and regulated utilities offer a steadier, dividend-paying way to stay in the AI game without trying to wager on which firms will deliver returns. Power companies are effectively “on the winning side” of AI disruption because so much capital is flowing into generation and transmission, Citigroup analyst Ryan Levine told Bloomberg.

Momentum is buoying big players in the sector, with NextEra Energy recently hitting a record high after raising its dividend and securing nuclear power agreements with Microsoft and Meta Platforms. Meanwhile, Duke Energy and Constellation Energy have also climbed, supported by expanding data center transactions.

Lower long-term treasury yields have helped too, since utilities rely heavily on borrowing to fund infrastructure. But with positioning now crowded and bond yields under scrutiny, the trade looks more delicate than it did a few months ago.

An “extreme buying frenzy” is how analysts at SentimenTrader described buying momentum, warning that valuations are starting to stretch beyond fundamentals.

In the UAE, the tone feels calmer, more about steady expansion than market euphoria

Dubai Electricity and Water Authority (Dewa) posted record results in 2025, with net income rising 25.7% to AED 9.1 bn and revenue increasing 6% to AED 32.8 bn. The stock has remained largely range-bound in early 2026 despite occasional volatility — including a 1.57% gain on 9 February following the release of FY 2025 results. Dewa’s shares are up 8.6% YTD. Dewa’s Moro Hub subsidiary is developing solar-powered data center infrastructure, supporting increasing electricity demand from AI applications.

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MARKETS THIS MORNING-

Asian stocks tracked Wall Street losses this morning as a private credit selloff and an escalation in US-Iran tensions weighed on the indices. Utilities stocks dragged Japan’s Nikkei down 1.3%, while shares of Sumitomo Pharma were volatile, surging and then falling 11% in a bout of what looks like profit-taking after it secured government greenlight for a Parkinson’s treatment. South Korea’s Kospi, however, bucked the trend with a 1.5% rise.

The values in the table above are listed according to the market position as of 3:30pm IST / 2pm GST.