economy
This group of stocks is a perfect way to play this fraught market, says Wells Fargo
Select utilities offer ways to play the AI boom while also hedging against rising geopolitical risks, the firm found.
TL;DR
- Utility stocks can serve as defensive plays against geopolitical risks and market volatility.
- The sector is also a beneficiary of the AI boom due to the high energy demands of data centers.
- Utilities historically outperform the S&P 500 during global conflicts and recessions.
- American Water Works is recommended for its regulated water and wastewater services, insulation from macro cycles, and role in supporting AI data centers.
- Exelon is suggested for investors looking to play the AI trade while benefiting from durable cash flows and infrastructure upgrades that will serve data center clients.