Energy Providers Emerge As Top Investor AI Play for 2026

Core Insights - Investors are increasingly viewing energy and power providers as compelling opportunities to gain exposure to the AI theme, according to BlackRock's 2026 Investment Directions report [1][4] - A significant 54% of survey participants identified energy providers as the most attractive investment related to AI, while 37% pointed to infrastructure and only 20% favored U.S. mega-cap tech giants [2] - The survey indicates that while investors remain optimistic about AI, they are seeking diversification beyond traditional tech stocks, with a focus on the broader ecosystems supporting AI [3] Industry Trends - The demand for electricity to power data centers is expected to surge, with Goldman Sachs projecting a 175% increase in data center power demand by 2030 compared to 2023 levels, equivalent to adding another Top 10 power-consuming country [6] - The reliability of power and water is seen as a multi-year investment theme due to rising demand, aging infrastructure, and the need to adapt to extreme weather events [7] - BlackRock emphasizes the importance of managing risks associated with mega-cap and AI exposure while capturing differentiated upside opportunities as the earnings outlook for the broader S&P 500 is expected to catch up to the Magnificent Seven by 2026 [5]