Xcel Energy Outpaces Utilities as Data-Center Demand Lifts Growth Case

Xcel Energy shares have held up better than the broader utility trade in 2026, even after retreating from their February peak. The stock was up about 2.2% year to date through September 14, while the Utilities Select Sector SPDR Fund had slipped marginally, according to market data cited by Barchart.

The edge is modest over the short run. XEL had fallen 3.5% over three months, versus a 3.8% decline for XLU, and remained roughly 11% below its 52-week high of $84.23. Over 12 months, however, Xcel had gained about 3.6%, while the utility ETF was slightly lower. That relative strength has made Xcel one of the more closely watched regulated utilities as investors search for companies that can turn rising electricity demand into rate-base growth.

The central argument is not simply defensive income. Xcel is positioning its transmission, generation and distribution buildout around larger customers, including data centers and advanced manufacturers. In February, the company announced an agreement to power a new Google data center in Minnesota, with the project tied to 1,900 megawatts of new clean energy. Xcel also signed a memorandum with NextEra Energy to accelerate generation and grid projects for large-load customers across its service territories.

That demand is arriving alongside an unusually large investment program. Xcel has outlined $60 billion of base capital expenditures for 2026 through 2030, with transmission, renewables and distribution accounting for much of the spending. For investors, the appeal is straightforward: capital deployed into regulated infrastructure can expand the rate base, provided regulators approve recovery and customers absorb the resulting costs.

The company’s latest results support the growth narrative. Xcel reported second-quarter 2026 ongoing earnings of 93 cents per share, up from 75 cents a year earlier, and reaffirmed full-year guidance of $4.04 to $4.16 per share. Management is targeting long-term annual earnings growth of 6% to 8% or more, alongside 4% to 6% annual dividend increases.

The trade-off is leverage, financing costs and execution risk. Xcel must fund the buildout while navigating rate cases, wildfire liabilities and customer concerns over higher bills. Its performance advantage is real, but keeping it will require turning projected demand into approved projects and dependable earnings.