Vanguard Utilities ETF

VPU

Market cap $8.46B

The Vanguard Utilities ETF is a conservative play on the AI boom. Led by AI demand, commercial electricity consumption is soaring.

Several ​large data centers and crypto facilities planning to connect to the Texas power grid ahead of ‌peak summer demand have failed key reliability tests, raising the risk of power outages just as electricity use hits its seasonal high, according to the state grid operator.

The Schwab U.S. Dividend Equity ETF holds 100 top dividend stocks. The Vanguard Total Bond Market ETF provides broad exposure to high-quality bonds.

The VIX ripped to 31.05 in late March before settling back near 18, and anyone who watched their growth holdings whip around during that stretch is probably re-reading the case for boring stocks.

NextEra's $66.8B Dominion deal fuels AI-driven power demand, making utility ETFs like XLU timely plays.

Power plants on the largest U.S. electric grid received a record payout of nearly $1 billion to cover their losses in the first quarter, when ​fuel costs surged during a winter cold snap, according to data analyzed by Reuters.

The North American Electric Reliability Corp. (NERC) said in a report on Tuesday that record ​resource additions have strengthened U.S. grid readiness ‌for the summer season, even as elevated risks remain in some areas.

The Vanguard Utilities Index Fund ETF is rated Buy, offering a 12–14% projected return. VPU benefits from a $1.3 trillion CapEx cycle driven by surging electricity demand from AI data centers. The CapEx cycle supports higher EPS growth guidance of 6–8%.

NextEra and Dominion must convince state and federal regulators that combining two of the U.S.'s largest utilities will benefit customers and avoid increasing electricity bills.

Water utilities are undervalued by 25% versus 11-year averages, while gas and electricity subsectors remain moderately overvalued. Vanguard Utilities ETF and Utilities Select Sector SPDR ETF offer near-identical fees, valuation, growth, return and risk metrics for long-term investors. XLU's higher trading volumes suit tactical moves, while RSPU offers lower company-specific risk through equal weighting.