3 Brilliant Energy Stocks to Buy Now and Hold for the Long Term
Key Points
Data centers' enormous electricity demands are straining the U.S. power grid.
Energy Transfer, Constellation Energy, and Enbridge are all benefiting from the AI market.
Each of these energy company offers a different value proposition to serve the needs of data centers.
- 10 stocks we like better than Energy Transfer ›
Memory and data storage stocks have been some of the biggest winners in the artificial intelligence (AI) space over the last year, but don't discount energy stocks when looking for AI-related investments with long-term potential.
Data centers need constant, reliable power, and that demand will only increase as more are brought online. The ongoing and massive buildout of AI data centers is a growing catalyst that can benefit Energy Transfer (NYSE: ET), Constellation Energy (NASDAQ: CEG), and Enbridge (NYSE: ENB).
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Stock No. 1: Energy Transfer
Energy Transfer is a diversified midstream energy company, transporting everything from natural gas to natural gas liquids to crude oil to refined products across North America. With its extensive network of pipelines and energy infrastructure, it's particularly well positioned to capitalize on the rising demand for natural gas to power electricity generation for data centers.
According to the nonprofit organization Global Energy Monitor, the U.S. has the most gas-fired power capacity under development worldwide, and a third of that new capacity is expected to power data centers and support AI's increasing energy needs.
Energy Transfer has been lining up deals in this space. It signed an agreement with Oracle to supply natural gas to three of its data centers, and also has deals with CloudBurst Data Centers and Fermi America to meet their AI-related energy needs.
Its forward price-to-earnings (P/E) ratio of 11.4 looks reasonable, as the market is valuing it as a steady cash generator. This may be a favorable moment for income-focused investors to start a position or add to their holdings. At the current share price, Energy Transfer's dividend payout offers an attractive yield of 6.8%.
Stock No. 2: Constellation Energy
Utility giant Constellation Energy serves both residential and commercial customers, offering a mix of energy solutions, and touts itself as the nation's largest provider of clean and low-carbon energy. What makes it most interesting for investors now, however, is its connection to AI and data centers through its nuclear power business.
Nuclear power plants provide steady baseload power, offering data center operators the stable energy they require without a major greenhouse gas footprint.
Constellation has been busy picking up customers. In June 2025, it signed a 20-year power purchase agreement with Meta Platforms, and in September 2024, it announced a 20-year power purchase agreement with Microsoft.
The stock trades today has a forward P/E ratio of around 23, reflecting that investors are pricing in some growth from increasing nuclear energy demand. There could still be plenty of upside ahead, but given that the stock has already experienced a 550% price gain over the last five years, it would be prudent for investors to keep their near-term expectations for further gains realistic.
Its dividend yield at the current share prices is a modest 0.5%, so this investment would be more appropriate for those seeking stock price appreciation.
Stock No. 3: Enbridge
Enbridge is a diversified energy provider. Its major business is in the midstream space, as it operates crude oil, natural gas, and liquids pipelines across North America. But it also operates natural gas utilities and a growing renewable energy segment.
Its biggest opportunities to meet AI-driven electricity demand will currently be through natural gas, but it can also capture some of that revenue through renewable energy. For example, last July, Meta Platforms signed a long-term contract with Enbridge to buy 100% of the renewable energy produced by a solar project in Texas.
Enbridge is also tapping into AI technology to make itself more efficient through a collaboration with Microsoft that is helping it detect pipeline issues more quickly and more precisely, as well as aiding it in improving energy transportation efficiency.
Enbridge trades at a forward P/E of 23.8, and considering the stock price has performed roughly the same as the S&P 500 over the last five years, this is a stock to pay up for if you're largely interested in dividend payouts. Its yield at the current share price is an attractive 5.2%.
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Jack Delaney has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Constellation Energy and Enbridge. The Motley Fool has a disclosure policy.
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