This time, the endpoint of computing power has become electricity.
Article author and source: TechFlow TechFlow
Entering 2026, the US stock market presents an extreme divide: the Nasdaq has failed to reach a new high for four consecutive months, and the valuations of AI leaders are suffering in the predicament of anxiously waiting for a new round of interest rate cuts; however, on the other side of the market, industrial, energy and utility stocks are the first to break through amidst the roar of the "old world".
This disconnect sends a clear signal: the competition in AI has completely evolved from a battle of algorithms to a battle of physical resources. If 2024 was the "Year of Chips," then 2026 will be the "Year One of Power Grid Modernization."
Currently, the revaluation of power assets is inevitable. In 2023-2024, the market was buying the "brain" (chips), while in 2025-2026, funds are flowing to the "heart and blood vessels" (power and power grid).
This article will provide investors with a comprehensive overview of the structural changes, competitive landscape, and opportunities inherent in the U.S. power grid industry.
RockFlow's research team believes that investors should focus on three tiers: the high-margin software automation tier represented by GEV, the high-certainty equipment manufacturing tier centered around Eaton and Schneider Electric, and the direct beneficiaries of infrastructure dividends led by PWR.
1. The Impact of AI Demand and the "Aging" Nature of the US Power Grid
For decades, Americans had almost forgotten what "electricity shortages" meant. In the early 21st century, thanks to the widespread adoption of LED lighting and the mandatory implementation of the EPA's "Energy Star" certification, energy consumption in the United States miraculously stabilized despite population growth.
But this stagnation was completely broken in 2025. With the exponential growth of large-scale data centers and AI applications, the energy demand curve saw a near-vertical inflection point:
- Doubled consumption: Global data center electricity consumption is projected to reach 1,000-1,050 terawatt-hours (TWh) by 2026, more than double the 2022 level.
- City-level scale: By the end of 2026, the power demand of a single independent data center campus will exceed 2 gigawatts (GW), equivalent to the power load of a medium-sized city.
- Structural share: In 2023, data centers accounted for only 4.4% of U.S. electricity consumption; by 2028, this figure is expected to soar to 12%.
Besides AI, a massive energy consumer, the return of manufacturing and the overall electrification of society (EVs, heat pumps, etc.) are also simultaneously driving up loads. The power industry is transitioning from a stagnant sector with zero growth to a new period of rapid expansion.
In stark contrast, the US power grid suffers from "old age problems".
The current U.S. power grid was not designed to support the AI era. It is more like a "Frankenstein's monster" patched up with mid-20th-century technologies.
The power grid mainly consists of three parts: power generation, transmission, and distribution. The current problem is:
- Aging infrastructure: As of 2023, 70% of the lines and transformers in the United States had been in service for more than 25 years. Most of the power grid was built in the 1960s and 70s and is approaching its design life limit of 50 to 80 years.
- The "last straw" of climate change: Dozens of weather disasters costing billions of dollars occurred in the first half of 2025 alone. Extreme heat causing line sagging and hurricane-induced power grid failures are becoming the norm for regional blackouts.
On the other hand, we are witnessing a desperate "queue crisis." Currently, nearly 2,600 GW of energy and storage capacity (almost twice the size of the existing US grid) is waiting to be connected to the grid.
It is understood that the delivery time for large transformers has been extended to 2.5 years. In the 2026/27 delivery year alone, PJM Interconnect's customers will pay an additional $3.5 billion in capacity costs due to grid connection bottlenecks.
2. Redefining the Smart Grid
The so-called modernization of the power grid is not simply about adding more power lines, but about transforming the traditional one-way analog network into a two-way, real-time, and intelligent digital network.
Nerve endings: Intelligent metering (AMI)
Advanced metering infrastructure is the first step towards modernization. It transforms one-way power supply into two-way data exchange. At its core, smart meters transmit data back to the system via radio frequency or cellular networks.
According to statistics, the global smart meter market was worth approximately US$30.9 billion in 2025 and is expected to reach nearly US$50 billion by 2030.
Immune System: Automated and Self-Healing Network (FLISR)
This represents a shift in infrastructure from passive to proactive. Using software developed by companies like GE Vernova, the upgraded power system can:
1. Automatic detection: Precisely locates the position of fallen trees or exploding transformers.
2. Automatic isolation: Instantly disconnects faulty lines.
3. Automatic recovery: Redistributes power from adjacent feeders to the normal area, achieving "self-healing".
Energy democratization: Virtual power plants (VPPs)
VPPs use cloud-based software to aggregate residential solar power and electric vehicle batteries. Consumers are no longer just buying electricity, but becoming "prosumers," earning money by selling electricity when the grid is under pressure.
Although the market segment is only worth tens of billions of dollars, it has great strategic significance for peak shaving and valley filling.
3. Who is sharing this huge cake?
Based on the current industry characteristics and profit structure of the US power grid, the RockFlow investment research team categorizes the beneficiary companies into four tiers:
Software and Automation: The Intelligent "Brain"
This is the segment with the highest profit margin and the deepest competitive advantage.
- GE Vernova (GEV): Coordinates the entire energy lifecycle through the GridOS platform. As a pure asset resulting from the GE spin-off, it is the undisputed leader in grid digitalization.
- Siemens (SIEGY): Possesses the leading Spectrum Power system. Its latest Gridscale X platform is defining the digital standard for the distribution side.
- Itron (ITRI): The king of smart metering. Its "edge intelligence" products can detect power outages in real time without the need for central processing, making them the "guardians" of the distribution network end.
Equipment manufacturing and power electronics: a crucial cornerstone
- Eaton (ETN): A power distribution equipment giant. From circuit breakers to transformers, Eaton's product portfolio covers almost all physical nodes in power grid modernization.
- ABB: A global expert in high-voltage products and automation. Its record order backlog is primarily driven by grid modernization projects.
- Schneider Electric (SBGSY): Focuses on smart grid technologies and microgrid solutions, providing end-to-end energy management solutions to help data centers maximize energy efficiency. Through its EcoStruxure platform, it deeply integrates hardware and digital management, holding a dominant position, particularly in the data center and microgrid sectors.
Engineering, Procurement and Construction (EPC): Builders
- Quanta Services (PWR): The dominant player in North American power transmission and distribution contracting. Its recent $72 billion deal with AEP is a prime example of the power grid upgrade trend.
- MasTec (MTZ): Focused on grid-connected renewable energy. Its $17 billion order backlog foreshadows a performance surge over the next two years.
Regulated Utilities: The Maintaining "Managers"
- NextEra Energy (NEE): The largest clean energy company in the United States, focusing on wind and solar power generation, owning a large amount of renewable energy assets, and having stable revenue by binding itself to large customers through long-term power purchase agreements (PPAs).
- Duke Energy (DUK): Possesses extensive power grid infrastructure covering multiple data center clusters. Through the modernization of its transmission and distribution networks, the company is able to provide data centers with efficient, low-loss power transmission services. Furthermore, DUK is investing in clean energy generation to meet the green electricity needs of its data centers.
Conclusion: The "revaluation" of power assets has begun.
By 2026, the power grid will no longer be a forgotten "utility," but a core asset concerning national security and the outcome of AI competition.
RockFlow's research team believes that, for investors, software-driven automation companies (GEV, ITRI) have the highest premium potential; equipment manufacturers (ETN, ABB) have the most certain order visibility; and EPC giants (PWR) are the direct beneficiaries of infrastructure dividends.
In the next five years, the alpha of US stocks will no longer exist only in code, but also in the roar of every smart transformer.
