There’s a surprising corner of the market investors are looking at to win big during the AI boom: utilities.

Once thought of as a dividend play, AI has powered growth for power companies under contract with giant data centers. Utilities-focused money manager W.H. Reaves & Company has ridden that wave, with its Virtus Reaves Utilities ETF posting a 14.5% annual return since opening in 2015—three points ahead of Morningstar’s related category.

“The growth outlook for utilities is probably the best it’s ever been,” says Reaves’ chief executive Jay Rhame. Still, there’s some risk, especially from local politics.

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President Donald Trump threatened to target key infrastructure in Iran if a deal isn’t reached soon to reopen the Strait of Hormuz. Trump on Monday claimed “great progress has been made” in discussions with the country, but cautioned that without a deal, the U.S. will be “blowing up and completely obliterating” Iranian energy plants, oil wells and the crucial Kharg Island—which processes an estimated 90% of Iran’s oil exports.

U.S. gas prices topped $4 per gallon early Tuesday, reaching their highest level since August 2022, which came in the aftermath of Russia’s invasion of Ukraine. According to AAA, the national average stands at $4.018 per gallon, marking a roughly 35% increase from a month earlier.

Hedge fund billionaire Bill Ackman’s bullish sentiment on Fannie Mae and Freddie Mac led their shares to skyrocket 51% and 47% respectively. Ackman and his firm, Pershing Square, have pushed the Trump Administration to relist the U.S.-controlled mortgage giants on the New York Stock Exchange, and President Donald Trump said last year he was “working on” taking........

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