AES vs. DUK: Which Is Better Positioned for Rising Power Demand?

The demand for clean electricity is accelerating worldwide, supported by a combination of long-term structural trends and rapid technological advances. As this need intensifies, utility companies like AES Corporation AES and Duke Energy DUK are becoming increasingly attractive investment opportunities due to their strong positioning in the energy transition.A major catalyst is the rapid expansion of large, artificial intelligence-powered data centers. These facilities require enormous and steady electricity loads to power advanced computing systems and maintain continuous cooling, significantly increasing overall grid demand. Driven by the shift to renewable energy, electric utilities in the United States are expanding beyond their conventional role as sources of income. Climate measures and federal incentives are changing the utilities sector. Utilities leading this transition are well positioned for steady growth, offering investors a relatively low-risk way to participate in the expanding clean energy market.Both companies are expanding generation capacity and grid infrastructure to meet increasing electricity consumption.Factors in Favor of AESAES is also benefiting from the increased demand from data centers, a market that is expanding quickly due to AI and cloud computing. By supplying power from its renewable energy projects, AES secures long-term contracts (Power Purchase Agreements or PPAs) and positions itself as a key partner in the tech industry's expansion. The company has signed or been awarded 2.2 gigawatt (GW) (as of Sept. 30, 2025), including 1.6 GW with data center customers. The company completed 2.9 GW of construction as of the same date, and currently holds a project backlog of 11.1 GW under signed PPAs.AES is well-positioned to capitalize on the growing electricity demand from data centers through its significant PPAs. The company currently has about 4.2 GW of data center PPAs in operation and a total of 8.2 GW in signed agreements.Factors in Favor of DUKDuke Energy proposes new rate structures and customer categories to manage large data center loads efficiently. The need to serve these loads accelerates necessary grid upgrades, improving overall system reliability and efficiency.In November 2025, Duke Energy filed a request with the North Carolina Utilities Commission to revise its electric rates for its two utilities — Duke Energy Carolinas and Duke Energy Progress — in the state. The objective behind this filing was to secure funding for significant grid and infrastructure upgrades. Duke Energy's investment plan focuses on data centers by providing reliable, scalable, clean, and predictable power — exactly what hyperscale and AI-driven facilities require to run and grow in a safe and effective manner.Let's compare the two stocks' fundamentals to find out which one is a better investment pick at present.How Do Zacks Estimates Compare for AES & DUK?The Zacks Consensus Estimate for AES’ 2026 earnings per share (EPS) indicates a year-over-year increase of 8.44%. AES’ long-term (three to five years) earnings growth rate is 11.17%. Image Source: Zacks Investment ResearchThe Zacks Consensus Estimate for Duke Energy’s 2026 EPS indicates a year-over-year rise of 6.15%. DUK’s long-term earnings growth rate is 6.87%. Image Source: Zacks Investment ResearchAES & DUK’s Return on Equity (ROE)ROE measures how efficiently a company is utilizing its shareholders’ funds to generate profits. AES’ current ROE is 18.83% compared with DUK’s 9.98%. The industry has an ROE of 10.47% at present.AES & DUK’s Debt PositionCurrently, AES and Duke Energy’s total debt to capital is 78.58% and 61.97%, respectively, compared with the industry’s average of 61.42%.AES & DUK’s Dividend YieldUtility companies generally distribute dividends and increase shareholders’ value. Currently, the dividend yield for AES is 4.96% compared with the Zacks S&P 500 composite’s average of 1.07%, and the same for Duke Energy is 3.57%.Valuation for AES & DUKAES shares trade at a forward 12-month Price/Earnings (P/E F12M) of 6X compared with Duke Energy’s P/E F12M of 17.73X, making AES relatively more attractive from a valuation standpoint.AES or DUK: Which Is a Better Choice Now?Both AES and Duke Energy are expanding generation and strengthening the grid so they can reliably supply electricity as demand rises, especially from energy-intensive users like data centers, while also supporting long-term growth.However, our current preference is AES, given its stronger long-term earnings growth, higher ROI, more attractive dividend yield and better valuation than DUK. AES carries a Zacks Rank #3 (Hold) and DUK has a Zacks Rank #4 (Sell) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. #1 Semiconductor Stock to Buy (Not NVDA)The incredible demand for data is fueling the market's next digital gold rush. As data centers continue to be built and constantly upgraded, the companies that provide the hardware for these behemoths will become the NVIDIAs of tomorrow.One under-the-radar chipmaker is uniquely positioned to take advantage of the next growth stage of this market. It specializes in semiconductor products that titans like NVIDIA don't build. It's just beginning to enter the spotlight, which is exactly where you want to be.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Duke Energy Corporation (DUK): Free Stock Analysis Report The AES Corporation (AES): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks