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Many industry observers expect artificial intelligence (AI) to be the defining technology of the next decade. Microsoft co-founder Bill Gates says AI will be as transformative as "the creation of the microprocessor, the personal computer, the internet, and the mobile phone."
Naturally, investors are focused on semiconductor companies like Nvidia, cloud companies like Amazon, and software companies like Palantir. However, many investors are overlooking one aspect of the technology: AI requires an incredible amount of power.
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The average ChatGPT query requires 10 times as much electricity as a traditional internet search, such that AI will boost data center power demand 165% by 2030.
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Total demand for electricity is forecast to increase at 2.4% annually through 2030 as data centers evolve into AI factories and domestic manufacturing activity increases.
U.S. power demand was flat over the last decade despite increases in population size and economic activity, but Goldman Sachs expects demand to spike in the coming years to an extent not seen since the early years of this century. Investors can position their portfolios to benefit from that once-in-a-decade opportunity by owning shares of the Vanguard Utilities ETF (NYSEMKT: VPU).
The Vanguard Utilities ETF provides exposure to electric utilities
The Vanguard Utilities ETF measures the performance of 69 U.S. companies in the utilities sector. The index fund is primarily invested in electric utilities (61%) and companies that provide multiple utilities (25%), though it also offers exposure to water and gas utilities and independent power producers.
The 10 largest holdings in the Vanguard Utilities ETF are listed by weight below:
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NextEra Energy: 11.5%
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Southern Company: 6.8%
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Duke Energy: 6.5%
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Constellation Energy: 5.5%
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Sempra: 4.3%
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American Electric Power: 3.8%
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Vistra: 3.7%
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Dominion Energy: 3.5%
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Public Service Enterprise Group: 3.3%
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PG&E: 3.2%
Four of the stocks listed above are currently outperforming the benchmark S&P 500 in 2025. But Constellation Energy and Vistra are leading the way, with year-to-date returns of 44% and 35%, respectively. Those gains speak to their strong market positions.
Specifically, Constellation Energy has the largest nuclear power fleet in the U.S. That matters because many experts think artificial intelligence data centers will lead to a renaissance in nuclear power because it's more reliable than other zero-emission sources, like solar and wind. Similarly, Vistra is the largest competitive power generator in the U.S. and has the second-largest nuclear power fleet.