As we enter 2026, the US stock market shows an extreme split: the Nasdaq has failed to reach new highs for four consecutive months, and the valuations of AI leaders are suffering while eagerly waiting for the next round of interest rate cuts; however, on the other end of the market, industrial, energy, and utility stocks are breaking through amidst the roar of the "old world."

This split sends a clear signal: the competition in AI has evolved from a battle of algorithms to a battle for physical resources. If 2024 is the "year of chips," then 2026 will be the "year of grid modernization."

Currently, the re-evaluation of power assets is unstoppable. In 2023-2024, the market is buying "brains" (chips), while in 2025-2026, funds are flowing towards "hearts and veins" (electricity and the grid).

This article will provide investors with a complete review of the structural changes, competitive landscape, and opportunities within the US electric grid industry.

The RockFlow research team believes that investors should focus on three gradients: the high-margin software automation layer represented by GEV, the high-certainty equipment manufacturing layer centered around Eaton and Schneider, and the infrastructure dividend harvesters led by PWR.

1. AI Demand Impact and the "Aging Disease" of the US Grid

For decades, Americans have almost forgotten what an "electricity shortage" is. In the early 21st century, thanks to the proliferation of LED lighting and the enforced implementation of the EPA's "Energy Star" certification, despite population growth, the energy consumption in the US miraculously stabilized.

However, this stagnation was completely disrupted in 2025. With the exponential growth of large-scale data centers and AI applications, the energy demand curve has taken an almost vertical turn:

• Doubling consumption: By 2026, global data center electricity consumption is expected to reach 1000-1050 terawatt-hours (TWh), more than double the level of 2022.
• Urban magnitude: By the end of 2026, the power demand of a single independent data center campus will exceed 2 gigawatts (GW), equivalent to the power load of a medium-sized city.
• Structural proportion: In 2023, data centers accounted for only 4.4% of US electricity consumption; by 2028, this figure is expected to soar to 12%.

In addition to AI, the return of manufacturing and the overall electrification of society (EVs, heat pumps, etc.) are also driving up loads simultaneously. The electricity industry is shifting from a "zero growth" dull industry to a new phase of rapid expansion.

In stark contrast, we have the "aging disease" of the US grid.

The current US grid was not designed to support the AI era. It resembles a "Frankenstein" assembled from mid-20th century technologies.

The grid mainly consists of three parts: generation, transmission, and distribution. The current problems are:

• Aging infrastructure: As of 2023, 70% of lines and transformers in the US have been in service for over 25 years. Most of the grid was built in the 1960s and 70s, nearing the design life limits of 50 to 80 years.
• The "last straw" of climate change: In the first half of 2025, dozens of billion-dollar weather disasters occurred. Line sagging caused by extreme heat and grid failures due to hurricanes are becoming the norm for regional blackouts.

On the other hand, we see the desperate "queue crisis." Currently, nearly 2600 GW of energy and storage capacity (almost double the current size of the US grid) is waiting to be connected to the grid.

It is reported that the delivery time for large transformers has been extended to 2.5 years. In just the 2026/27 delivery year, PJM Interconnection customers are expected to pay an additional $3.5 billion in capacity costs due to grid connection bottlenecks.

2. Redefining the Smart Grid

The so-called grid modernization is not just about adding more wires, but transforming the traditional one-way analog network into a two-way, real-time, intelligent digital network.

Nerve Endings: Advanced Metering Infrastructure (AMI)

Advanced metering infrastructure is the first step of modernization. It turns one-way power delivery into two-way data exchange. Its core is that smart meters transmit data back to the system via radio frequency or cellular networks.

According to statistics, the global smart meter market is valued at about $30.9 billion in 2025, and is expected to approach $50 billion by 2030.

Immune System: Automation and Self-Healing Networks (FLISR)

This signifies a transition from passive infrastructure to proactive systems. With software developed by companies like GE Vernova, the upgraded power systems can:

1. Automatic detection: Accurately locate the position of fallen trees or transformer explosions.

2. Automatic isolation: Instantly cut off fault lines.

3. Automatic restoration: Redistribute power from adjacent feeders back to normal areas, achieving "self-healing."

Energy Democratization: Virtual Power Plants (VPP)

VPPs use cloud software to aggregate home solar energy and electric vehicle batteries. Consumers are no longer just buyers of electricity but become "prosumers," making money by selling electricity during peak grid pressure times.

Although the segmented market size is only in the tens of billions, its strategic significance for peak shaving and valley filling is immense.

3. Who is Sharing This Huge Cake?

Based on the current industry attributes and profit structure of the US electric grid, the RockFlow research team classifies beneficiary companies into four gradients:

Software and Automation: Intelligent "Brains"

This is the segment with the highest profit margin and the deepest moats.

• GE Vernova (GEV): Coordinates the entire energy lifecycle via the GridOS platform. As a purely spun-off entity from GE, it is the absolute leader in grid digitalization.
• Siemens (SIEGY): Possesses a leading Spectrum Power system. Its latest Gridscale X platform is setting the digitalization standard for the distribution side.
• Itron (ITRI): The king of smart metering. Its "edge intelligence" products can detect power outages in real-time without a central process, serving as the "guardian" at the end of the distribution network.

Equipment Manufacturing and Power Electronics: Important Cornerstones

• Eaton (ETN): A giant in distribution equipment. From circuit breakers to transformers, Eaton's product portfolio covers almost all physical nodes of grid modernization.
• ABB: A global expert in high-voltage products and automation. Its record backlog is largely driven by grid modernization projects.
• Schneider Electric (SBGSY): Focuses on smart grid technologies and microgrid solutions, providing end-to-end energy management solutions to help data centers maximize energy efficiency. By deeply integrating hardware with digital management through the EcoStruxure platform, it occupies a dominant position especially in the data center and microgrid sector.

Engineering, Procurement, and Construction (EPC): Builders

• Quanta Services (PWR): The leader in the North American transmission and distribution contracting field. Its recent $72 billion agreement with AEP is the best footnote for the trend of grid upgrades.
• MasTec (MTZ): Focused on renewable energy grid integration. Its $17 billion backlog indicates an impending performance explosion over the next two years.

Regulated Utilities: Conservative "Managers"

• NextEra Energy (NEE): The largest clean energy company in the US, focused on wind and solar power generation, holding a substantial portfolio of renewable energy assets, and ensuring stable income through long-term Power Purchase Agreements (PPAs) with large customers.
• Duke Energy (DUK): Owns extensive grid infrastructure that covers multiple data center clusters. Through the modernization of its transmission and distribution networks, the company can provide efficient, low-loss electricity transmission services to data centers. Additionally, DUK is investing in clean energy generation to meet the demand for green power from data centers.

Conclusion: The "Revaluation" of Electrical Assets Has Begun

In 2026, the electric grid will no longer be that forgotten "utility," but a core asset related to national security and the outcome of AI.

The RockFlow research team believes that for investors, software-driven automation companies (GEV, ITRI) have the highest premium capability; equipment manufacturers (ETN, ABB) have the most certain order visibility; and EPC giants (PWR) are the direct harvesters of infrastructure dividends.

In the next five years, the Alpha in the US stock market will no longer just exist in code but will be found in the roar of every smart transformer.