EPISODE · Jan 23, 2026 · 26 MIN
Solving utility affordability doesn’t mean data center development goes dark
from Global Research Unlocked · host BofA Global Research
AI Fuels Power Growth, Politics Shape the Path As utilities enter 2026, the investment narrative evolves from a pure growth story to one defined by smarter positioning and selective opportunity. While AI‑driven power demand and data center expansion remain powerful secular tailwinds, political scrutiny about electricity affordability-especially in states with tightly contested elections-introduces complexity. Some state governments are addressing these concerns by designing data‑center tariffs that shift costs away from residential customers, ideally lowering consumer bills while unlocking economic development. In the opinion of BofA Global Research utilities analyst Ross Fowler, recent weakness in power stocks likely reflects rotation and a somewhat unfair association with AI spending risks in corners of the market rather than fading fundamentals. This has created some particularly attractive entry points. Utilities that balance growth, regulation, and reliability are well positioned to perform in this current market regime. As for the source of generation growth, different costs and profiles will mean various utilities will see growth, from solar and storage to nuclear. You may also enjoy listening to the Merrill Perspectives podcast, featuring conversations on the big stories, news and trends affecting your everyday financial life. "Bank of America" and “BofA Securities” are the marketing names for the global banking businesses and global markets businesses (which includes BofA Global Research) of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., Member FDIC. Securities, trading, research, strategic advisory, and other investment banking and markets activities are performed globally by affiliates of Bank of America Corporation, including, in the United States, BofA Securities, Inc. a registered broker-dealer and Member of FINRA and SIPC, and, in other jurisdictions, by locally registered entities. ©2026 Bank of America Corporation. All rights reserved.
What this episode covers
AI Fuels Power Growth, Politics Shape the Path As utilities enter 2026, the investment narrative evolves from a pure growth story to one defined by smarter positioning and selective opportunity. While AI‑driven power demand and data center expansion remain powerful secular tailwinds, political scrutiny about electricity affordability-especially in states with tightly contested elections-introduces complexity. Some state governments are addressing these concerns by designing data‑center tariffs that shift costs away from residential customers, ideally lowering consumer bills while unlocking economic development. In the opinion of BofA Global Research utilities analyst Ross Fowler, recent weakness in power stocks likely reflects rotation and a somewhat unfair association with AI spending risks in corners of the market rather than fading fundamentals. This has created some particularly attractive entry points. Utilities that balance growth, regulation, and reliability are well positioned to perform in this current market regime. As for the source of generation growth, different costs and profiles will mean various utilities will see growth, from solar and storage to nuclear. You may also enjoy listening to the Merrill Perspectives podcast, featuring conversations on the big stories, news and trends affecting your everyday financial life. "Bank of America" and “BofA Securities” are the marketing names for the global banking businesses and global markets businesses (which includes BofA Global Research) of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., Member FDIC. Securities, trading, research, strategic advisory, and other investment banking and markets activities are performed globally by affiliates of Bank of America Corporation, including, in the United States, BofA Securities, Inc. a registered broker-dealer and Member of FINRA and SIPC, and, in other jurisdictions, by locally registered entities. ©2026 Bank of America Corporation. All rights reserved.
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Solving utility affordability doesn’t mean data center development goes dark
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