By Nate Wolf
Artificial intelligence dominated conversations in the investing world in 2023 and 2024. The buzzword of choice in 2025 is power.
Hyperscalers are investing enormous sums to build data centers for AI applications. While money appears to be no object, energy has become a constraint. The third-quarter earnings season laid bare the premium that big U.S. companies are placing on power.
Mentions of the words "power", "electricity", or "energy" in earnings calls from S&P 500 companies this quarter have more than doubled from a year ago, according to a Tuesday research note from Wells Fargo. The hyperscaler mindset has become "buy power now, revisit later," the bank said.
"We expect to double our overall [data-center] capacity by the end of 2027," said Amazon.com CEO Andy Jassy on a conference call Thursday. "Today, overall in the industry, maybe the bottleneck is power."
"We have the most expansive data-center fleet for the AI era, and we are adding capacity at an unprecedented scale," said Microsoft chief executive Satya Nadella last Wednesday. Nadella then brought up the company's Fairwater facility in Wisconsin, which will scale to 2 gigawatts of power next year.
The discussion goes beyond hyperscalers. Companies ranging from utility players such as FirstEnergy to glass makers like Corning to logistics real estate trusts like Prologis have commented on growing energy demand in calls with investors.
Energy wasn't as popular a topic on earnings calls until this year, according to Wells Fargo's analysis. Mentions of power hit a high in late 2005, perhaps due to double-digit energy inflation that year, and have been on the decline in the decades since. The current earnings cycle represents a reversal back to those mid-2000s highs.
Companies aren't just talking about power. They're making moves. There have been 9.6 gigawatts worth of AI data center deals announced this year, Wells Fargo found, with the vast majority of that coming since the beginning of September.
Power deals that didn't exist two years ago -- or at least didn't warrant headlines -- are now major company news. More than 35 behind-the-meter natural gas AI projects have been announced this year, Wells Fargo reported. That number was less than five in 2024 and zero in 2023.
All of this demand means that at least some energy providers are set to profit from selling the one thing hyperscalers can't get enough of.
"Power remains our preferred way to play the AI capex cycle," wrote the Wells Fargo team.
Write to Nate Wolf at nate.wolf@barrons.com
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November 04, 2025 15:31 ET (20:31 GMT)
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