JPMorgan Lifts AEP Price Target Following Utility Sector Model Update

American Electric Power Company, Inc. (NASDAQ:AEP) is included among the 15 Best Blue-Chip Stocks with Growing Dividends.

On December 12, JPMorgan analyst Jeremy Tonet raised his price target on American Electric Power Company, Inc. (NASDAQ:AEP) to $125 from $121, while maintaining a Neutral rating on the stock. The adjustment followed updates to the firm’s models across the North American utilities sector.

Electric demand is now accelerating at its fastest pace since the 1960s and 1970s, and forecasts continue to move higher. A major driver behind that trend is the rapid expansion of AI infrastructure, which is expected to require a massive increase in power generation. Capacity tied to data center growth alone is projected to jump from about 45 GW today to more than 130 GW by 2030. In November, Gabelli Funds portfolio manager Tim Winter said several stocks are positioned to benefit from this shift, with AEP among the names he highlighted.

American Electric Power Company, Inc. (NASDAQ:AEP) has already begun adjusting to this backdrop. The company recently raised its long-term EPS growth outlook to 7%–9%, up from 6%–8%, reflecting expectations for roughly 28 GW of incremental peak demand by 2030. About 22 GW of that demand is expected to come from data centers. AEP also increased its five-year capital investment plan to $72 billion and disclosed a sizable backlog, with roughly 190 GW of customers currently waiting to interconnect to its system.

In November, the company also announced long-term strategic agreements with Quanta Services. The partnerships are designed to support execution of AEP’s expanded capital plan, including the buildout of high-voltage transmission, while strengthening supply chain reliability and expanding development capabilities. These efforts are aimed in part at meeting rising demand from the fast-growing data center market.

American Electric Power Company, Inc. (NASDAQ:AEP) is one of the largest electric utility companies in the U.S., providing generation, transmission, and distribution services to more than 5 million customers across 11 states.

While we acknowledge the potential of AEP as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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