BUZZ-US utilities rise in 2024 driven by AI boom

Updates with history utility out-performance data

Shares of U.S.-based utilities rally in 2024 with Vistra Corp VST.N gaining ~260% YTD, Constellation Energy CEG.O up ~91% YTD

VST is second biggest YTD pct gainer in S&P 500 .SPX, just ahead of A.I. favorite Nvidia NVDA.O. CEG is 10th biggest gainer, NRG Energy NRG.N, up ~74% YTD, is S&P's 19th fastest advancer, according to LSEG data

According to Bespoke Investment Group data, 2024 is first year in at least the last decade with three utilities among top 20 YTD S&P 500 gainers. NRG rose most in 2017 as sole utility in top 20, again the only top-20 utilities stock in 2018

Utilities boosted this year by surging demand for power for data center expansions related to growing AI needs

Utilities often referred to as "bond proxies," for strong, stable dividends that compete with Treasury yields

In September, CEG and Microsoft MSFT.O signed power deal to help resurrect unit of Three Mile Island nuclear plant in Pennsylvania

YTD S&P 500 utility index .SPLRCU up ~19% making it the fifth biggest advancer among the S&P 500's 11 major industry sectors with Entergy ETR.N up ~49%, NiSource NI.N up ~38%, Public Service Enterprise PEG.N up ~37%

"Sector strength in 2024 has been underpinned by stabilizing rates and inflationary expectations throughout the year, greater uncertainty created by the election cycle for many non-utility sectors," said KeyBanc Capital Markets earlier in December

Brokerage also cited AI-driven electricity demand translating into tangible load growth, and earnings per share growth target revisions

(Reporting by Pooja Menon in Bengaluru, Sinéad Carew in New York)

((Pooja.Menon@thomsonreuters.com; sinead.carew@thomsonreuters.com))