XLU just posted its steepest monthly drop in nearly two years, and one analyst sees the floor still a painful distance away.
Texas regulators just froze data-center hookups, and one application fee cut AEP Ohio's pipeline by more than half overnight.
Launched on December 16, 1998, the State Street Utilities Select Sector SPDR ETF (XLU) is a passively managed exchange traded fund designed to provide a broad exposure to the Utilities - Broad segment of the equity market.
XLU gives you exposure to over 30 utilities, but the AI data-center boom is quietly concentrating inside just a handful of them, and owning the fund means paying for a lot of names that will miss the surge entirely.
Traditionally speaking, when advisors and investors have thought about investing in utilities, it oftentimes is done for defensive purposes. Key Takeaways: Utilities tend to be added to portfolios for their defensive advantages amid inflation, but the sector offers more potential than meets the eye.
The Utilities Select Sector SPDR Fund (NYSEARCA:XLU) was the consensus “AI power” trade heading into 2026.
The Utilities Select Sector SPDR Fund (NYSEARCA:XLU) has quietly become one of the more popular AI-adjacent trades on Wall Street.
If you hold the Utilities Select Sector SPDR Fund (NYSEARCA:XLU) for defensive income, you already know the appeal: the largest utility ETF, dirt-cheap fees, and a portfolio of regulated power names that tend to hold up when growth stocks wobble.
BULIX, FSUTX and FKUTX gain traction as utilities ride defensive demand and AI-driven electricity growth, reshaping their role in 2026 portfolios.
The AI data-center power crunch has turned utilities from bond proxies into growth stocks, and two funds sit at the center of that trade: the Utilities Select Sector SPDR Fund (NYSEARCA:XLU) and the Vanguard Utilities Index Fund ETF (NYSEARCA:VPU).
The State Street Utilities Select Sector SPDR ETF (XLU) was launched on December 16, 1998, and is a passively managed exchange traded fund designed to offer broad exposure to the Utilities - Broad segment of the equity market.
State Street Utilities Select Sector SPDR ETF offers defensive exposure with growing clean energy relevance, especially as AI-driven power demand accelerates. XLU's top holdings are securing long-term clean energy agreements with major tech firms, positioning the ETF as a proxy for AI infrastructure growth. While most XLU holdings are fairly valued short-term, forward P/E ratios suggest increasing undervaluation by 2027, supporting a medium-to-long-term buy case.