Investors Boost American Electric Power on AI GrowthWritten by Chris Markoch. Published 10/30/2025.
Key Points- American Electric Power stock is up 5% after mixed earnings as investors focus on its $72 billion CapEx plan and AI-driven demand growth.
- AEP raised its long-term earnings growth forecast to 7–9% and plans a 10% annual rate base increase through 2030 to support AI infrastructure expansion.
- With utilities gaining from the AI data center boom, AEP’s plan to limit rate hikes to 3–5% makes it a stable long-term buy on any pullback.
American Electric Power Inc. (NASDAQ: AEP) stock is up approximately 5% despite the company posting mixed earnings on Oct. 29. This extends the stock’s strong year-to-date performance in 2025, which is up roughly 31%.
AEP reported revenue of $6.01 billion, beating estimates of $5.57 billion. On the bottom line, earnings per share (EPS) of $1.80 were slightly below expectations of $1.81. Through the first three quarters of 2025, both revenue and earnings are up on a year-over-year (YOY) basis.
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Utilities stocks can act like cyclical plays. A longer-term story unfolds as demand for more energy coincides with the need to update aging infrastructure. That's a favorable setup for a company like American Electric Power, which owns and operates one of the largest transmission networks in the United States.
Many investors have piled into these stocks in 2025 as part of a long-term artificial intelligence (AI) trade. The post-earnings surge in AEP stock suggests investors are willing to play the long game as AEP’s role in expanding AI infrastructure becomes clearer.
The Next Generation of AI InfrastructureThe concept of AI infrastructure now encompasses more than just hardware and software. Companies like NVIDIA Corp. (NASDAQ: NVDA) and hyperscalers like Microsoft Corp. (NASDAQ: MSFT) and Meta Platforms (NASDAQ: META) will continue to play central roles in this new economy. Yet the growing power demands from data centers also make a compelling long-term case for utilities stocks such as AEP.
The company raised its forecast for long-term operating earnings growth to 7%–9% over the next five years. To support that outlook, AEP announced a $72 billion capital expenditures (CapEx) plan based on an anticipated 10% annual growth in the company’s rate base.
The most aggressive growth is expected between 2028 and 2030 as these projects come online. For 2026, the company guided earnings of $6.15 to $6.45 per share, roughly an 8% increase from the midpoint of prior guidance.
Modest Rate Increases Will Be a Win-WinAn unwelcome side effect of the data center buildout is upward pressure on residential electric bills. Preliminary data from the U.S. Energy Information Administration (EIA) indicates U.S. residential electricity prices were about 6% higher in 2025 compared with August 2024 levels.
Data center demand is one of the factors driving that increase. The EIA projects that electricity consumption by U.S. data centers nearly doubled since 2022 and is expected to continue rising through 2026 and beyond.
American Electric Power addressed this issue by outlining efforts to limit the impact of rising demand on customers’ bills. AEP says it will cap residential rate increases at between 3% and 5% annually across its system.
AEP Remains a Buy-the-Dip Candidate After EarningsInvestors clearly liked AEP’s update. The stock gapped up on volume of 4.65 million shares, roughly 138% of its average daily volume.
That move pushed the stock above October resistance between $117 and $119 and signals strong bullish momentum that could attract follow-through buying in the coming days. While not decisive on its own, the combination of today's elevated volume and 6.8 days to cover short positions could amplify gains if short sellers begin to unwind.
Contrasting that bullish picture, the MACD indicator shows a recent bearish crossover, suggesting investors may need more than the earnings report to sustain momentum. The Relative Strength Index (RSI) is around 65 as of this writing (not shown), which also tempers the near-term upside.
If the stock pulls back, the 50-day simple moving average (SMA) should offer broad support and could present a buy-the-dip opportunity for longer-term investors.
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