$10 Billion American Electric Update Is a Big Deal for These 4 Holdings

We’d hoped to bring you the following comments in today’s Daily Rundown, but airport weather delays and extended time on the tarmac are leading us instead to share them in the following alert.

We continue to connect the dots between the current earnings season and holdings in the Pro Portfolio. The latest are comments from American Electric Power AEP and Duke Energy DUK that bring further support for our positions in Eaton ETN, United Rentals URI, Vulcan Materials VMC and the non-residential business at Waste Management WM.

American Electric shared that it sees increasing demand, particularly from commercial customers, and that it anticipates adding 20 gigawatts of incremental load by 2030, a 55% increase over the 2024 summer peak load. Management also shared that it sees potential incremental investments of up to $10 billion, in addition to the current $54 billion capital plan, driven by economic development and data center expansion. That economic development accounts for roughly 6 gigawatts of industrial load across a number of diverse industries, including steel, autos and energy.

Turning to Duke Energy, the company shared it invested more than $3 billion of capital in the quarter and is on track for $15 billion for the full year. In April, Duke signed new letter agreements for nearly 1 gigawatt of data center projects, and advanced manufacturing projects continue to ramp.

As other electric utilities report, we’ll be collecting their capital spending comments, but the above, as well as other data points, indicate that the expected energy crunch is tracking. That keeps us upbeat about the Portfolio’s position in Van Eck Uranium and Nuclear Energy ETF NLR.

Student Debt Repayments Resume

Building on the comment we shared on Tuesday morning from Block XYZ CEO Jack Dorsey, we’d remind members that student debt repayments are expected to resume this week as the Department of Education resumes collecting on school loans. We see this as an incremental headwind to consumer spending, one that, at the margin, will lead consumers to be that much more selective in their spending.

We continue to favor the differentiated business models at Costco COST, Amazon AMZN and American Express AXP over those retailers and others that are more tied to consumer spending levels.

More Pro Portfolio

At the time of publication, TheStreet Pro Portfolio was long ETN, URI, VMC, WM, NLR, COST, AMZN and AXP.