Energy Transfer Poised to Capitalize on AI-Driven Power Demand

Energy Transfer (NYSE: ET) is increasingly positioning itself as a primary beneficiary of the surging energy requirements associated with the global data center boom. As artificial intelligence drives a massive increase in computing power, the demand for reliable natural gas delivery is becoming a central catalyst for the midstream operator. The scale of the opportunity is significant, with market projections for the data center sector ranging from $699 billion by 2034 to $902 billion by 2033. According to the International Energy Agency, natural gas currently serves as the third-largest electricity source for these facilities, creating a strategic opening for companies with extensive transport capabilities. Energy Transfer operates approximately 140,000 miles of pipeline infrastructure. The company has already secured high-profile agreements, including a supply deal with Oracle for three data centers and a 20-year contract with Entergy Louisiana. The latter is particularly notable as it supports power plants fueling Meta Platforms' hyperscale AI data center in Richland Parish. From a valuation perspective, the stock trades at a forward price-to-earnings ratio of 11.3 and offers a dividend yield of nearly 7%. While the stock has risen 13% so far in 2026, investors are looking toward the Q1 earnings report on May 5 for confirmation of revenue momentum. The primary risk remains a potential slowdown in the projected pace of data center deployment.