{"id":475698,"date":"2026-06-04T10:14:32","date_gmt":"2026-06-04T10:14:32","guid":{"rendered":"https:\/\/www.newsbeep.com\/il\/475698\/"},"modified":"2026-06-04T10:14:32","modified_gmt":"2026-06-04T10:14:32","slug":"big-techs-ai-spending-is-on-track-to-top-700-billion-this-year-heres-who-may-cash-in-next","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/il\/475698\/","title":{"rendered":"Big Tech’s AI Spending Is on Track to Top $700 Billion This Year. Here’s Who May Cash In Next."},"content":{"rendered":"

The numbers coming out of big tech this year are hard to fathom. Amazon plans to spend about $200 billion on capital expenditures in 2026. Microsoft now expects roughly $190 billion. Alphabet has guided to as much as $190 billion, and Meta Platforms recently raised its range to $125 billion to $145 billion. Together, the four are on track to spend more than $700 billion in a single year, the vast majority of it on the data centers and chips behind artificial intelligence (AI)<\/a>. The bills have grown so large that even these cash-rich companies are now leaning on debt and equity markets to help fund them. <\/p>\n

All that computing power has to be plugged in somewhere. And that is where a quieter set of beneficiaries comes in: the electric utilities that generate and deliver the electricity these data centers consume. One of the most exposed is American Electric Power (AEP<\/a> 0.63%), which operates the largest electricity transmission network in the U.S. <\/p>\n

\"Electric<\/p>\n

Image source: Getty Images.<\/p>\n

A surge in contracted demand<\/p>\n

In the first quarter of 2026, AEP signed up another 7 gigawatts of future load, bringing its total contracted load expected by 2030 to 63 gigawatts — up from 56 gigawatts just one quarter earlier. Nearly 90% of that is data centers, including the same hyperscalers behind that $700 billion in spending, with the rest mostly industrial customers. A single gigawatt can power hundreds of thousands of homes, so this is an enormous block of contracted future demand landing on one utility.<\/p>\n

The demand is concentrated in AEP’s fastest-growing states — Indiana, Ohio, Oklahoma, and Texas — and it is reshaping the company’s spending. AEP raised its five-year capital plan to $78 billion, up from $72 billion a quarter earlier, with most of the increase going toward new transmission and generation. Management expects that investment to grow its rate base at nearly an 11% compound annual rate and to lift its long-term operating earnings compound annual growth rate above 9% a year through 2030 — a brisk pace for a regulated utility.<\/p>\n

The build-out is already showing up in the utility’s financials. AEP’s first-quarter revenue rose about 10% year over year to $6.0 billion, and its operating earnings per share rose to $1.64 from $1.54 in the same quarter of 2025. Management reaffirmed its 2026 operating earnings guidance of $6.15 to $6.45 per share. And to soften the impact on existing customers, AEP said its large-load contracts could generate up to $16 billion in cost offsets over the life of the agreements.<\/p>\n

\"American<\/p>\n

Today’s Change<\/p>\n

(-0.63%) $-0.80<\/p>\n

Current Price<\/p>\n

$126.31<\/p>\n

Key Data Points<\/p>\n

Market Cap<\/p>\n

$69B<\/p>\n

Day’s Range<\/p>\n

$126.26 – $129.59<\/p>\n

52wk Range<\/p>\n

$100.72 – $139.44<\/p>\n

Volume<\/p>\n

1.1K<\/p>\n

Avg Vol<\/p>\n

3.8M<\/p>\n

Gross Margin<\/p>\n

31.77%<\/p>\n

Dividend Yield<\/p>\n

2.99%<\/p>\n

The risks and the valuation<\/p>\n

The growth case for AEP, of course, rests on the build-out actually getting built — and that is not guaranteed. The biggest constraint is the slow pace at which the regional operators that run the grid connect new power plants.<\/p>\n

“[I]f something is not done now, I expect we could still be having these same conversations in 10 years,” said AEP CEO Bill Fehrman in the company’s first-quarter 2026 earnings call.<\/p>\n

Funding the plan carries its own risk.<\/p>\n

AEP is leaning on both debt and fresh stock, including a $2.6 billion common stock offering in May and about $7 billion in growth equity planned through 2030. Issuing shares to build, however, dilutes existing shareholders. And as a regulated utility, AEP needs state regulators to sign off on the rates it charges and the returns it earns — decisions ultimately out of its control.<\/p>\n

There is also the question of whether the AI spending boom underpinning all this demand holds up. AEP says its take-or-pay contracts, which require customers to pay minimum demand charges whether or not they use the full capacity, limit the downside. But a sustained cut to hyperscaler AI spending could still leave it with plants and lines built for demand that never arrives.<\/p>\n

Then there is the price. At about $126 as of this writing, up about 10% year to date, AEP trades at a forward price-to-earnings ratio<\/a> of about 20. That is a robust valuation<\/a> multiple for a utility, and it shows the market already paying up for years of data center-driven growth. With that said, the stock boasts a meaningful dividend yield<\/a> of about 3%.<\/p>\n

For investors who believe the AI build-out has years left to run, AEP offers something the tech giants spending the cash do not: a regulated, contracted, and somewhat predictable way to profit from it, with an attractive dividend attached.<\/p>\n","protected":false},"excerpt":{"rendered":"The numbers coming out of big tech this year are hard to fathom. Amazon plans to spend about…\n","protected":false},"author":2,"featured_media":475699,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[345,343,344,85,46,125],"class_list":["post-475698","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-ai","tag-artificial-intelligence","tag-artificialintelligence","tag-il","tag-israel","tag-technology"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/475698","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=475698"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/475698\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/475699"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=475698"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=475698"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=475698"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}