While the S&P 500 is up 20.30% year-to-date, utilities — tracked by Utilities Select Sector SPDR Fund (NYSE:XLU) — have surged by 26.99%.

The sector is outpacing the market's biggest names, including tech and communication services.

The leaders posting significant gains in this space include NextEra Energy Inc (NYSE:NEE), Southern Co (NYSE:SO) and Duke Energy Corp (NYSE:DUK). But it's Vistra Corp. (NYSE:VST) and Constellation Energy Corp (NASDAQ:CEG) that are embracing the AI revolution to supercharge their growth.

Vistra, Constellation: The New Tech Titans?

Vistra stock has rocketed 205.61% this year, becoming the top-performing stock in the S&P 500. With its focus on nuclear energy, it's carving a niche in powering AI data centers.

Constellation Energy is up 119.86%, and has similarly thrived. The company struck deals with Microsoft Corp (NASDAQ:MSFT) to fuel the tech giant's AI and cloud infrastructure with clean nuclear energy.

Read Also: Microsoft Taps Constellation For 20-Year Carbon-Free Power – 3,400 Jobs Coming To Pennsylvania

These partnerships make utilities a surprising AI play, blending old-school reliability with cutting-edge tech applications. The newfound relevance of nuclear power in the AI era is a growth driver that no one saw coming.

Are Utilities The New Safe Haven?

While utilities have long been a defensive play, their AI adoption has turned them into a growth story.

Funds like the Virtus Reaves Utilities ETF (NYSE:UTES), an actively managed fund, are gaining attention. With over 40% year-to-date returns, it's outperforming traditional market-weighted sector peers. UTES' smart bets on Vistra and Constellation have paid off handsomely, proving that even "boring" sectors can surprise investors.

Looking ahead, the rise of electrification-themed ETFs, such as those filed by Global X and Tema, suggests that utilities may continue to thrive in the AI-driven future.

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