One does so tire of hearing about “disruptive technologies,” doesn’t one? All this fuss over artificial intelligence, as if it weren’t simply a rather enthusiastic consumer of electricity. The fact remains, darling, that these digital baubles require power – and rather a lot of it. The MIT Technology Review, bless their diligent hearts, informs us that data centers are already devouring 4.4% of all U.S. energy. And by 2028? Well, let’s just say AI’s appetite could equal the combined usage of 22% of American households. A trifle alarming, perhaps, but also… an opportunity. One simply must look for the silver lining, even when it’s obscured by a cloud of server farms.
Naturally, this escalating demand has rather splendid implications for those companies actually producing the power. And even more splendid if they happen to distribute a little something to shareholders while doing so. So, let’s peruse a few contenders, shall we? Presented, as it were, in ascending order of dividend yield. Don’t bother thanking me; it’s really rather elementary.
Profits, Written in the Stars
Constellation Energy (CEG +0.59%) – based in Baltimore, a city with a certain… robust charm – is, shall we say, rather good at generating electricity. Specifically, nuclear power. They’re the largest in the States, and a significant provider of clean energy, accounting for roughly 10% of the national total. They’re not exactly setting the world alight with growth – a modest 3.14% compound annual growth rate over three years – but they’re undeniably steady. A gross profit margin of 20.13% and a net income margin of 11% suggest a certain competence, and the dividend, while currently yielding a mere 0.5%, has been growing for three years. A promising start, though hardly a dazzling performance.
What’s particularly clever, though, is their partnership with Microsoft. Resurrecting the Three Mile Island nuclear plant – a name that still sends shivers down the spines of certain regulators – to power Microsoft’s data centers in the area. A stroke of genius, really. It expands Constellation’s nuclear capacity, locks in Microsoft as a long-term customer for 20 years, and is expected to boost annual earnings per share by 10%-13% through 2030. A strong hand, played with admirable finesse.
New Energy for the Next Era
NextEra Energy (NEE 0.31%), hailing from Florida – a state known for its sunshine and, shall we say, eccentric politics – is another major player in the green energy game. They operate nationwide, with 65% of their 76-gigawatt capacity derived from renewable sources or nuclear power. Like Constellation, they’ve attracted the attention of a tech giant. Alphabet, it seems, has decided to partner with NextEra to bring Iowa’s Duane Arnold Energy Center back online, specifically to power their data centers. A remarkably similar arrangement to the one with Microsoft, wouldn’t you agree? Expanding nuclear capacity, locking in a long-term customer for 25 years… it’s all frightfully predictable, but undeniably effective. NextEra is forecasting an 8% earnings per share growth through 2035, which, while not entirely revolutionary, is certainly respectable.
This is a faster-growing company than Constellation, with a three-year revenue CAGR of 9.85% and superior profitability – a gross margin of 62% and a net income margin of 24.73%. The dividend, currently yielding 2.71%, has been growing for 30 years, with a 10% growth rate over the past five. One anticipates that will only accelerate as electrical demand continues to rise. Rather a good show, all things considered.
The Duke
Duke Energy Corporation (DUK 0.24%), while lacking the glamorous partnerships of Constellation and NextEra, possesses a rather enviable geographical advantage. Most of their facilities – nuclear, renewable, and, yes, even fossil fuel – are located in North and South Carolina. This positions them perfectly between Virginia and Georgia, the No. 1 and No. 3 states for new data center construction. Apparently, nearly 3,000 new data centers are currently being built in America, and a staggering 595 of them are in Virginia alone. Virginia anticipates a 153% surge in energy demand by 2040 and is desperately attempting to import electricity from neighboring states to cope. A trifle chaotic, perhaps, but decidedly advantageous for Duke.
North Carolina’s connection to the same grid as Virginia, combined with Virginia’s recent surpassing of California as the largest energy importing state, creates a rather compelling opportunity for Duke. Major secular demand and growth are on the horizon. This has contributed to Duke’s three-year revenue CAGR of 5.29%, its gross margin of 52.4%, and its net margin of 15.97%. It also explains why their 15-year dividend growth streak is unlikely to end anytime soon, and why the dividend currently yields a respectable 3.57%. A rather appealing prospect, wouldn’t you say? A Duke, indeed.
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2026-01-24 15:13