Utility stocks are on fire — here are Wall Street analysts' top picks

Utility stocks have recently emerged as market leaders, with a notable 4% increase over the past week, marking their best performance of the year. The S&P 500 Utilities ETF has seen a 12% rise year-to-date, rebounding from last year's decline which was influenced by high costs and interest rates. Analysts attribute this resurgence to anticipated lower interest rates and a surge in electricity demand driven by artificial intelligence and data centers.

Constellation Energy, a major nuclear plant operator in the U.S., has seen its stock soar by over 85% this year, benefiting from government initiatives towards green energy and increased power needs from data centers. The company predicts a minimum of 10% annual earnings growth throughout the decade. Similarly, NextEra Energy and Southern Company are experiencing robust growth due to their involvement in renewable energy and strategic positioning in high-demand areas, respectively.