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Additional Reading from MarketBeat.com
Why This Midwest Utility Is the Hottest Stock on Wall Street Right NowWritten by Chris Markoch. Publication Date: 4/13/2026. 
Key Points
- NiSource is benefiting from rising Midwest data center demand tied to AI infrastructure growth.
- Natural gas is emerging as a near-term solution for hyperscalers needing reliable 24/7 power.
- NI remains in a strong uptrend, but valuation and momentum suggest a pullback may offer a better entry.
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In real estate, the mantra is "location, location, location." That principle helps explain the recent surge in NiSource (NYSE: NI) stock. NiSource is a utility company that has suddenly become one of the analyst community’s favorites. In fact, despite the stock being up 15% in 2026, KeyCorp just raised its price target for NI. But is that a ceiling or a new floor? At face value, NiSource is a typical regulated utility delivering natural gas and electricity to residential, commercial and industrial customers. But the company has found itself in greater demand as the data center buildout pushes into the nation’s heartland. NiSource Proves Why Location MattersThe bull case for NI isn’t new, but it bears repeating. Hyperscalers need dedicated data centers to house the servers and related equipment powering their artificial intelligence (AI) ambitions. That isn’t as simple as “if you build it, they will come.”
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It comes down to energy. AI is power-hungry, so data centers require ample 24/7 electricity to operate. That demand clashes with an aging grid that needs upgrades for many applications beyond data centers. That’s why nuclear energy is back in consideration, but new reactors take years to come online — which brings natural gas into the near-term equation. Natural gas has become the preferred fuel for hyperscalers, and NiSource may play a key role. One of NiSource’s primary operating regions is the Midwest, which is becoming strategically important for data centers for three reasons:
Cheaper land Lower power costs Available grid capacity Why NiSource specifically? KeyCorp points to the company’s jurisdictions having constructive regulatory environments and relatively modest regulatory lag. That provides greater cost certainty and supports stable, predictable earnings for NiSource. Is NI Priced for Perfection?NI is up more than 16% in 2026, pushing its price-to-earnings ratio above 24x. That’s a premium to the broader market and its sector, though not an extreme one. Still, investors should consider whether the biggest gains are already priced in. NI has been in a steady uptrend since bottoming near $38 last spring, recording a persistent series of higher lows that suggests accumulation rather than speculation. The 50-day moving average, currently around $46, has acted as a reliable floor through several pullbacks, including a sharp but short-lived dip in early March that was quickly bought.  The stock closed on April 9 at $48.47, well above that moving average — a constructive sign. The one concern is momentum: the 14-day RSI has climbed into the mid-60s, putting it just below overbought territory. Its signal line at 53 confirms the broader uptrend is intact, but the gap suggests the stock may need to digest recent gains before attempting the next leg higher. Volume has been relatively steady without the climactic surge that typically signals a top, which is mildly encouraging for bulls. Taken together, the chart suggests NI is extended in the short term but not broken. A pullback toward the 50-day moving average near $46 would provide a more comfortable entry for investors who believe the data center thesis has further to run. Why Utilities Like NiSource Are Gaining Investor AttentionA 16% year-to-date gain for a regulated utility is unusual, and momentum can swing both ways. Utilities often attract defensive flows, but that dynamic can reverse quickly when risk appetite returns. Valuation concerns are valid, but context matters. Regulated utilities rarely trade at growth multiples unless the market sees a visible, durable earnings catalyst. In NiSource’s case, the data center narrative could provide exactly that. If even a handful of hyperscaler agreements materialize in its key jurisdictions, the resulting earnings trajectory could make a 24x multiple look reasonable in hindsight. That said, much of the easy money may already have been made. The analyst community has taken notice — KeyCorp's raised price target is unlikely to be the last upgrade — but upgrades often cluster near peaks as well as inflection points. Investors who missed the initial move would generally be wiser to wait for a pullback than to chase a utility into extended territory. The bottom line: NiSource has earned its moment. Its Midwest footprint, constructive regulatory backdrop and natural gas infrastructure place it squarely in the path of one of the most capital-intensive buildouts in modern technology history. Location, as it turns out, really does matter. The question now is how much of that advantage the market has already priced in. |
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