Top 3 Energy Stocks Set to Benefit from AI Demand in 2025 – TradingView News

The rapid growth of artificial intelligence is widely expected to drive up to a 160% increase in data center-driven electricity demand by the end of this decade.

According to Guggenheim analyst Shahriar Pourreza, energy stocks particularly well-positioned to benefit from such a massive rise include Constellation Energy, Vistra Corp and Talen Energy.

All three stocks he mentioned in a recent note are already on track to close at record levels this year. But Pourreza is convinced that the rally is only in its early stages.

Constellation Energy Corp CEG

Constellation Energy stock is currently up around 100% compared to early 2024.

Still, Shahriar Pourreza sees further upside in Constellation Energy next year as he expects a massive increase in electricity demand as tech companies continue to expand AI.

The company’s nuclear assets, in particular, could push artificial intelligence companies to sign similar deals with Constellation Energy, as Microsoft did in September.

The associated upswing in the financial sector could push the CEG share price to $328 in 2025, according to Guggenheim.

The investment firm also favors Constellation Energy for an additional dividend yield of 0.61%.

Talen Energy Corp TLN

Similar to Constellation Energy, Talen also signed a power deal with a tech giant – Amazon.com Inc. – which contributed significantly to its 300% year-to-date gain.

Despite the extraordinary rally, the Guggenheim analyst believes Talen Energy stock isn’t particularly expensive to own given an expected significant increase in electricity demand in 2025.

He sees TLN as an opportunity to gain exposure to the AI ​​market, which is estimated to grow at a compound annual rate of more than 28% by the end of this decade.

Shahriar Pourreza has a $246 price target on Talen shares, representing an increase of about 25% from current levels. However, unlike CEG, Talen Energy does not currently pay a dividend.

Vistra Corp VST

Among the energy stocks Guggenheim recommends for 2025, Vistra Corp has gained the most this year.

In fact, it is the best-performing S&P 500 company in 2024.

Shares of the Texas-based company have more than tripled in the past 12 months, but are still cheaper than Constellation Energy as of press time.

Shahriar Pourreza believes the company’s nuclear and gas assets are attractive to AI companies.

“I like Vistra because I don’t have to bet on whether the next deal will be a nuclear power plant or a gas power plant.”

In his report, he continued to call Vistra stock his top pick for 2025.

Pourreza’s price target of $177 suggests potential for an additional 26% increase in VST from current levels.

Vista also pays an additional dividend yield of 0.61%.