The S&P 500 utilities sector has gained well over 15% in 2025. Equities will be affected if the major stock market indices experience another significant decline similar to the one earlier this year. However, history shows that stodgy utility stocks are likely to hold their ground much better than high-flying technology stocks, especially those chasing the artificial intelligence mania. Oddly enough, AI and data center growth are becoming a massive tailwind for the utility sector, as power demands are surging. So, utility stock investors are ostensibly involved in technology without the risk. With a product always in demand and summer heat setting records, high-yielding utilities may be the best option now for nervous investors looking for passive income.
Large hyperscale data centers, which are increasingly common, require the power of 100 megawatts or more, equivalent to the annual electricity consumption of around 350,000 to 450,000 electric cars. This skyrocketing demand is only expected to continue as the adoption of AI continues to grow. A significant portion of data center energy consumption comes from cooling systems that maintain optimal operating temperatures. Big tech will continue to find solutions for this issue. Of the Global Industry Classification Standard’s 11 stock sectors, utilities are considered one of the most recession resistant. That is because the power they generate is always in demand, regardless of the state of the business cycle.
We screened the J.P. Morgan utility stock analysis, and four top companies among the industry’s leaders are Buy-rated. All makes sense for growth and income investors worried about the impact of tariffs (which is relatively de minimis in the sector) and the potential for a recession later this year or in 2026.
Why are we covering J.P. Morgan’s utility stocks?
History shows that utility stocks will likely hold their ground much better than high-flying technology stocks, especially those chasing artificial intelligence mania. With a product always in demand and the summer heat right around the corner, high-yielding utilities may be the best idea now for worried investors, especially as data center demand cranks up the volume for electricity.
Entergy
Entergy Corp. (NYSE: ETR | ETR Price Prediction) is an energy company engaged primarily in electric power production and retail distribution operations in the Deep South of the United States. This top utility stock always makes sense for conservative investors and pays a rich 4.04% dividend. Entergy operates in two segments.
The Utility segment generates, transmits, distributes, and sells electric power in portions of:
- Arkansas
- Louisiana
- Mississippi
- Texas
- City of New Orleans
The company also distributes natural gas.
The Entergy Wholesale Commodities segment is involved in:
- The ownership, operation, and decommissioning of nuclear power plants located in the northern United States
- Sale of electric power to wholesale customers
- Provision of services to other nuclear power plant owners
- Ownership of interests in non-nuclear power plants that sell electric power to wholesale customers
The company generates electricity through gas, nuclear, coal, hydro, and solar sources. It sells energy to retail power providers, utilities, electric power co-operatives, power trading organizations, and other power generation companies.
Its power plants have approximately 24,000 megawatts (MW) of electric generating capacity, which includes 5,000 MW of nuclear power.
The company delivers electricity to 3 million utility customers in Arkansas, Louisiana, Mississippi, and Texas.
The J.P. Morgan price target for the shares is $102.
Brookfield Renewable
This off-the-radar utility stock is an ideal choice now for growth and income investors, as well as those concerned with environmental issues. Brookfield Renewable Corp. (NYSE: BEPC) operates renewable power platforms and sustainable solutions.
The company’s portfolio consists of hydroelectric, wind, solar, and storage facilities in North America, South America, Europe, and Asia. It has approximately 33,000 megawatts of installed capacity and a development pipeline with approximately 155,400 megawatts.
Brookfield Renewable’s businesses include:
- Renewable Power & Transition
- Infrastructure
- Private Equity
- Real Estate
- Credit and Insurance Solutions
Its Renewable Power & Transition business operates across five continents, managing a diverse portfolio of hydro, wind, solar, distributed energy, and sustainable solutions.
The Infrastructure business owns and operates assets across the transport, data, utilities, and midstream sectors.
Brookfield’s Private Equity business sectors include business services, infrastructure services, and industrials, while the Real Estate business sectors include housing, logistics, hospitality, science and innovation, office, and retail.
J.P. Morgan has its target price set at $39.
NextEra Energy
This top company is one of the highest-rated utility stocks across Wall Street. NextEra Energy Inc. (NYSE: NEE) is an electric power and energy infrastructure company. It operates through its wholly owned subsidiaries, NextEra Energy Resources and NextEra Energy Transmission (collectively, NEER), and Florida Power & Light Company (FPL).
The FPL segment is a rate-regulated electric utility that generates, transmits, distributes, and sells of electric energy in Florida. FPL has approximately 35,052 megawatts of net generating capacity, over 91,000 circuit miles of transmission and distribution lines, and 921 substations.
The NEER segment owns, develops, constructs, manages, and operates electric generation facilities in wholesale energy markets in the United States and Canada and includes assets and investments in other businesses with a clean energy focus, such as battery storage, natural gas pipelines, and renewable fuels. It owns, develops, constructs, and operates rate-regulated transmission facilities in North America.
J.P. Morgan’s price target for the stock is $86.
PPL
PPL Corp. (NYSE: PPL) is an energy company with headquarters in Allentown, in the Lehigh Valley region of eastern Pennsylvania. This utility stock is another top pick at J.P. Morgan, and it is perfect now for conservative investors and pays a very dependable dividend. PPL provides electricity and natural gas to approximately 3.6 million customers in the United States.
It operates through three segments:
- Kentucky Regulated
- Pennsylvania Regulated
- Rhode Island Regulated
The company delivers electricity to customers in Pennsylvania, Kentucky, Virginia, and Rhode Island; provides natural gas to customers in Kentucky and Rhode Island; and generates electricity from power plants in Kentucky.
The J.P. Morgan price target is set at $39.
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