Skip to navigationSkip to main contentSkip to right columnReuben Gregg Brewer, The Motley FoolSat, July 4, 2026 at 6:35 PM GMT+2 5 min readCompanies are investing heavily in artificial intelligence (AI). That said, AI can't "live" without electricity, so there's been a huge increase in demand for power. In fact, some industry watchers expect the utility sector to spend as much as $240 billion in 2026 to meet AI demand. There are some problems for investors to consider here, and some solutions.A step change in electricity demandElectricity demand grew 10% between 2005 and 2025. It is expected to grow by 60% between 2025 and 2045. There are multiple reasons for the increase, but a key factor is artificial intelligence and the data centers that house AI. Given the massive capital investment in AI underway now, utilities have little choice but to ramp up their own investments. This spending is a growth catalyst for utilities.Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »Image source: Getty Images.There's just one problem. Regulated electric utilities pass on spending to consumers through rate increases. Rate increases have to be approved by regulators. With inflation running high and electricity costs already on the rise, there has been a pushback against AI investments. That could put pressure on utilities if they aren't allowed to pass on all of their capital investment costs.The best choice for investors may actually be to focus on companies that can provide power outside of the regulated framework. But you have to be careful as you make your final investment decisions.Make sure to consider valuation when you buyFor example, Bloom Energy (NYSE: BE) makes hydrogen fuel power cells. These are factory-built and can easily provide dedicated power to an AI data center. The company started 2026 with a $6 billion backlog for its fuel cells, up 2.5x year over year. It is well-positioned to serve AI customers. But there's an even bigger backlog to consider for services, since each new fuel cell comes along with a service contract. Indeed, the total backlog stands at a huge $20 billion.The only problem is that Bloom Energy stock has risen more than 1,000% over the past year. The company hasn't yet produced sustainable profits, so earnings aren't particularly useful for valuation. However, the price-to-sales ratio is a shockingly high 29x. It appears that Wall Street is already pricing a great deal of future success into Bloom Energy's stock price.Terms and Privacy PolicyEU DSA contactPrivacy & Cookie SettingsMore Info