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Data Center & Natural Gas Link Grows: Will WMB, ENB, KMI Stocks Gain?
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With the demand for data processing increasing due to the rapid expansion of artificial intelligence (AI) applications, data centers are facing unprecedented energy challenges. Natural gas is emerging as a pivotal solution in the power strategies of these facilities, offering the reliability, scalability and economic viability needed to support continuous and intensive data processing operations.
Integrating natural gas with renewable energy sources allows data centers to balance sustainability goals with operational efficiency, positioning natural gas as a cornerstone of the future energy landscape for this sector. Analysts and investors have noted that leading natural gas and oil pipeline companies are already addressing the rising electricity demand driven by AI-powered data centers on their recent earnings calls.
Major energy companies like The Williams Companies Inc. (WMB - Free Report) , Enbridge Inc. (ENB - Free Report) and Kinder Morgan Inc. (KMI - Free Report) are well-positioned to benefit from this AI-driven trend.
Why AI Data Centers are Power-Hungry
AI data centers have become significant electricity consumers due to several key factors. Firstly, deep learning and other AI workloads require immense computational power. High-performance processors, such as graphics processing units and tensor processing units, are essential to handle the billions of calculations needed for training large neural networks. This computational intensity drives up electricity usage substantially.
Secondly, data storage systems, particularly those designed for high-speed access and redundancy, represent another major source of energy consumption. These storage systems are critical for rapidly retrieving and processing large datasets, but they also require substantial power to operate efficiently.
Finally, the heat generated by high-performance processors necessitates robust cooling systems to maintain optimal operating temperatures and avoid hardware damage. These cooling systems, while essential, add another layer of electricity consumption, further contributing to the overall energy demands of AI data centers.
Will Natural Gas Pipeline Companies Gain?
As the adoption of AI data centers accelerates, the electricity demand is expected to grow substantially, putting considerable pressure on existing transmission grids. To accommodate this rising demand, utilities may be compelled to invest in new natural gas power plants, which would increase the need for midstream infrastructure, such as expanded pipeline networks, to ensure a reliable supply of natural gas to these facilities. This dynamic could create new opportunities for investment in both power generation assets and the associated midstream infrastructure needed to support this growing energy consumption.
WMB Expands Gas Network to Meet Data Center-Power Demand
The Williams Companies is focused on the expansion of its natural gas infrastructure to meet heightened energy demand from data centers. The Transco Power Express Pipeline is among the key projects that will be designed to transport 950 million cubic feet of natural gas daily to Virginia, a state known for increasing electricity demand for rapidly growing data centers. Moreover, WMB is planning similar expansions in the Northwest and Mountain West, especially in places like Idaho and Salt Lake City, where demand for power from new data centers is increasing.
Data Center Boom Powers KMI’s Growing Project Backlog
Kinder Morgan is experiencing a notable rise in natural gas demand, fueled by the expansion of data centers and AI applications. In the first quarter of 2025, KMI included $900 million in its project backlog, raising its total backlog to $8.8 billion. Of the total $900 million, KMI mentioned that more than 70% of this additional backlog is associated with meeting power demand, a proportion of which should be coming from the data centers.
ENB’s Strong Investment Opportunities to Power Data Center
Enbridge expects strong growth opportunities from the rising demand for power from data centers. On the recent earnings call, ENB mentioned the identification of more than 35 individual projects or initiatives that will create demand for roughly 11 billion cubic feet per day of incremental natural gas. The company expects several billion dollars in capital investment opportunities for the projects through 2032. ENB, whose pipelines transport 20% of the total natural gas consumed in the United States, is expecting attractive returns from the initiatives.
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Data Center & Natural Gas Link Grows: Will WMB, ENB, KMI Stocks Gain?
With the demand for data processing increasing due to the rapid expansion of artificial intelligence (AI) applications, data centers are facing unprecedented energy challenges. Natural gas is emerging as a pivotal solution in the power strategies of these facilities, offering the reliability, scalability and economic viability needed to support continuous and intensive data processing operations.
Integrating natural gas with renewable energy sources allows data centers to balance sustainability goals with operational efficiency, positioning natural gas as a cornerstone of the future energy landscape for this sector. Analysts and investors have noted that leading natural gas and oil pipeline companies are already addressing the rising electricity demand driven by AI-powered data centers on their recent earnings calls.
Major energy companies like The Williams Companies Inc. (WMB - Free Report) , Enbridge Inc. (ENB - Free Report) and Kinder Morgan Inc. (KMI - Free Report) are well-positioned to benefit from this AI-driven trend.
Why AI Data Centers are Power-Hungry
AI data centers have become significant electricity consumers due to several key factors. Firstly, deep learning and other AI workloads require immense computational power. High-performance processors, such as graphics processing units and tensor processing units, are essential to handle the billions of calculations needed for training large neural networks. This computational intensity drives up electricity usage substantially.
Secondly, data storage systems, particularly those designed for high-speed access and redundancy, represent another major source of energy consumption. These storage systems are critical for rapidly retrieving and processing large datasets, but they also require substantial power to operate efficiently.
Finally, the heat generated by high-performance processors necessitates robust cooling systems to maintain optimal operating temperatures and avoid hardware damage. These cooling systems, while essential, add another layer of electricity consumption, further contributing to the overall energy demands of AI data centers.
Will Natural Gas Pipeline Companies Gain?
As the adoption of AI data centers accelerates, the electricity demand is expected to grow substantially, putting considerable pressure on existing transmission grids. To accommodate this rising demand, utilities may be compelled to invest in new natural gas power plants, which would increase the need for midstream infrastructure, such as expanded pipeline networks, to ensure a reliable supply of natural gas to these facilities. This dynamic could create new opportunities for investment in both power generation assets and the associated midstream infrastructure needed to support this growing energy consumption.
3 Must-Watch Midstream Stocks: WMB, KMI & ENB
Three midstream energy majors that investors should keep an eye on are The Williams Companies, Enbridge and Kinder Morgan. All the stocks currently carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
WMB Expands Gas Network to Meet Data Center-Power Demand
The Williams Companies is focused on the expansion of its natural gas infrastructure to meet heightened energy demand from data centers. The Transco Power Express Pipeline is among the key projects that will be designed to transport 950 million cubic feet of natural gas daily to Virginia, a state known for increasing electricity demand for rapidly growing data centers. Moreover, WMB is planning similar expansions in the Northwest and Mountain West, especially in places like Idaho and Salt Lake City, where demand for power from new data centers is increasing.
Data Center Boom Powers KMI’s Growing Project Backlog
Kinder Morgan is experiencing a notable rise in natural gas demand, fueled by the expansion of data centers and AI applications. In the first quarter of 2025, KMI included $900 million in its project backlog, raising its total backlog to $8.8 billion. Of the total $900 million, KMI mentioned that more than 70% of this additional backlog is associated with meeting power demand, a proportion of which should be coming from the data centers.
ENB’s Strong Investment Opportunities to Power Data Center
Enbridge expects strong growth opportunities from the rising demand for power from data centers. On the recent earnings call, ENB mentioned the identification of more than 35 individual projects or initiatives that will create demand for roughly 11 billion cubic feet per day of incremental natural gas. The company expects several billion dollars in capital investment opportunities for the projects through 2032. ENB, whose pipelines transport 20% of the total natural gas consumed in the United States, is expecting attractive returns from the initiatives.