Is PPL Positioned to Lead the Utility Sector in the Data Center Era?

PPL Corporation PPL is benefiting from increased data center demand, particularly in Pennsylvania and Kentucky, as these facilities require substantial electricity. Data center market is projected to see rapid expansion due to increasing artificial intelligence workloads. According to an Arizton Advisory & Intelligence report, the U.S. data center market size is expected to reach $308.83 billion by 2030. 

PPL is experiencing load growth, driven by data center demand. Nearly 11 gigawatts (GW) (up from 9 GW) of potential data center demand is in the advanced stages, implying a transmission capital investment of $700-$850 million. Active data center requests have increased to 50 GW for 2026-2034 in the Pennsylvania segment. Current data center projects within the PPL EU service territory are at various stages of the approval process, with the majority already having obtained PJM approval. 

The Kentucky segment announced the first 400 megawatt (MW) hyperscale data center campus in Louisville. Active data center requests have increased to nearly 6 GW for 2026-2034.

PPL is undertaking substantial capital investments to upgrade its infrastructure and connect these data centers to the grid. It expects a regulated capital investment plan of $20 billion during 2025-2028. The capital investment for 2025 and 2026 is expected to be $4.3 billion and $5.2 billion, respectively.

Through these initiatives, PPL is strategically positioning itself to capitalize on the anticipated boom in the data center market. By proactively investing in grid modernization, enhancing transmission and distribution infrastructure, and pursuing partnerships or service agreements with data center operators, PPL aims to meet this rising demand reliably and efficiently, ultimately securing new revenue streams and strengthening its long-term growth prospects.

Data Center Boom: A Growing Opportunity for Utilities

Other utilities that stand to benefit from the growing demand from data centers are as follows:

NRG Energy NRG has entered into Letters of Intent with two leading data center developers, Menlo Equities and PowLan. Targeting 400 MW of retail supply in the initial phase, these arrangements have the potential to scale to 6.5 GW, with work expected to start in 2026.

Dominion Energy D is experiencing commercial load growth, driven by the demand from data centers. The company has nearly 40 GW of data center capacity at various stages of development, including approximately 10 GW of capacity contracted under electric service agreements.

PPL Stock Price Performance

In the past year, PPL’s shares have risen 23.4% compared with the industry’s 18.2% growth.

PPL’s Earnings Estimates

The Zacks Consensus Estimate for PPL’s 2025 and 2026 earnings per share indicates an increase of 7.69% and 7.97%, respectively.

PPL Stock Trading at a Premium

PPL is trading at a premium relative to the industry, with a forward 12-month price-to-earnings ratio of 17.96X compared with the industry average of 14.63X.
 

PPL currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

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This article originally published on Zacks Investment Research (zacks.com).

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