Southern Company has weathered the 2025 volatility well and is trading near the 52-week high as of May 5, 2025. For the first quarter of 2025, Southern saw a -1.8% decline in residential electricity sales that was almost entirely offset by a 0.5% growth rate in both Commercial and Industrial sales including an 11% increase from the data centers (1). Data center electricity demand is projected to continue to increase nationwide, driving the first secular period of power demand growth in almost twenty years. This is a dramatic shift in [...]

Below is the trend that Southern Company and other utilities are facing over the next 5-15 years. Electricity consumption is, for the first time in about 20 years, expected to increase. That’s the chart on the left. In the 1960-1990’s American homes saw significant technological developments including refrigeration, HVAC units, personal computing, television, etc. Each development required a significant increase in electricity generation. Since the turn of the century, however, residential electricity demand has been flat. Same with industrial electricity consumption. That is expected to pick up thanks to the [...]

Utility investing is typically a straight forward prospect with very little surprises, good or bad. This is why utilities are commonly considered “safe haven investments” by academics and investors when the economy turns South. Revenue and earnings growth are generally predictable and the dividend is generally predictable as a result which typically results in lower stock volatility when economic growth is waning. Artificial Intelligence seems to have changed that narrative, however. Because AI requires extensive computing power, data center demand for utilities throughout the country have increased substantially over the [...]