The utilities sector has made a stunning reversal from its 2023 slump, enjoying a lift from artificial intelligence excitement, and further upside is still ahead, according to Morningstar. Utilities are up about 10% in 2024, surging on expected demand for electricity to power AI data centers . It marks a reversal from last year, when the sector was largely beaten down by higher interest rates and suffered a 10.2% decline.
NiSource is geographically in an ideal position to benefit from further manufacturing and data center development, as it has access to low-cost energy resources, he added, noting that its Virginia utility already provides gas to data centers in that region for onsite power generation. Miller reaffirmed his $34 per share fair value estimate for NiSource this week, reflecting nearly 20% upside from Thursday's close. NiSource has a dividend yield of 3.7%, and shares are up nearly 7% in 2024.