US , which had surged to records on the back of AI-driven data center demand, showed renewed weakness. The S&P 500 Utilities Index is on track for its worst month since August, even after hitting an all-time high in October. Investors now question whether power producers can scale generation as fast as earlier narratives suggested.
Constellation Energy shares have dropped about 11% from their October peak after an earnings call that offered few details on new capacity tied to data centers. Vistra declined roughly 16% since mid-October as the pace of AI-related contract announcements slowed. NRG also tempered expectations by holding guidance where some investors had hoped for upgrades.
Analysts say now influence the sector. If electricity demand from AI workloads grows more slowly than projected, utilities that expanded valuations on aggressive assumptions could look expensive. Comments from DeepSeek about more energy-efficient AI models earlier this year already triggered a sharp sell-off in some power stocks, highlighting the risk that technology shifts may reduce expected load growth.
Even after the pullback, several names still show large year-to-date gains. Constellation, NRG, and GE Vernova remain well ahead of the broader market, which supports the view that recent moves may also reflect profit-taking after a strong run.