By Avi Salzman
A political plan to get more power plants built for AI data centers sent electricity stocks swinging on Friday, lifting energy equipment makers like GE Vernova and Siemens Energy higher, while pressuring existing power plant owners like Vistra and Constellation Energy.
The stock moves were spurred by news that President Donald Trump and the governors of some Northeastern states plant to announce a proposal to encourage the construction of power plants for AI data centers. They want the nation's largest electricity grid operator, known as PJM, to hold a special auction for big tech companies to buy power. PJM covers 13 states and Washington, D.C., serving around 65 million customers. GE Vernova shares jumped 5.7% in early trading. Constellation was down 8.5%, on track for its largest drop since April.
The plan could be announced as soon as Friday, though the White House did not immediately respond to a request for comment on the details. Trump had teased the news earlier this week in a post on Truth Social that said he was working with tech companies to solve the power problem. Bloomberg and the Wall Street Journal reported on it late on Thursday.
The idea behind the plan is that companies such as Microsoft and Alphabet will pay for power contracts lasting at least 15 years, incentivizing power companies to build new plants. If the tech companies foot the bill, the logic goes, regular consumers would not have to fund the new capacity. Theoretically, this kind of move could help solve two problems at once: ensuring enough power for AI data centers and sparing consumers from higher bills at a time when electricity prices are rising. PJM has been paying a record amount to secure electricity capacity, which filters down into consumer bills.
GE Vernova and Siemens Energy are two of the dominant makers of natural gas-turbines, the largest source of U.S. power generation. If tech companies pay for new plants, that would spur more demand for turbines. Jefferies analyst Julien Dumoulin-Smith wrote on Friday that GE Vernova is the "clearest winner."
Constellation Energy and Vistra are two of the largest owners of existing power generation in the PJM grid area. Both have benefited as demand has ramped up for electricity -- and have even struck bespoke deals to supply power to tech data centers. Their generating assets have been scarce, boosting pricing power and profits. But Trump's auction raises the risk that power will become less scarce and prices could fall.
Write to Avi Salzman at avi.salzman@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
January 16, 2026 11:06 ET (16:06 GMT)
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