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))