AEP Surges 5.88% on $72B Capital Plan and AI-Driven Demand Surge – Is This the New Normal?

Summary
• American Electric Power (AEP) surges 5.88% intraday to $121.88, hitting 52-week high of $122.79
• Company unveils $72B capital plan to meet AI/data center-driven power demand, up from $54B
• Q3 adjusted EPS of $1.80 misses estimates but revenue jumps 11% to $6.01B
• Options frenzy: 2025-11-21 $120 call options see 300% price change ratio and $799K turnover
AEP’s explosive move reflects a perfect storm of capital plan expansion, AI infrastructure tailwinds, and earnings resilience. With peak demand projected to double by 2030, the stock’s 5.88% rally—despite a bearish engulfing candle—signals a re-rating of its long-term growth narrative.

Capital Plan Expansion and AI-Driven Load Growth Ignite AEP's Surge
AEP’s 5.88% intraday rally stems from its $72 billion capital plan, a 33% jump from $54 billion, to meet 28 GW of new load from data centers and industrials. The company cited 190 GW of load requests in development, with peak demand expected to surge to 65 GW by 2030. This aligns with EIA forecasts of record U.S. power consumption in 2025-26 driven by AI infrastructure. AEP’s $1.6B federal loan guarantee for transmission upgrades and a 2.2% dividend hike further reinforced its growth story, overshadowing a Q3 adjusted EPS miss of $0.01.

Electric Utilities Sector Mixed as AEP Outperforms NEE
While AEP surged, sector leader NextEra Energy (NEE) fell 2.32% on concerns about Florida’s regulatory environment. AEP’s focus on AI-driven infrastructure—backed by 28 GW of contracted load—differentiates it from peers. The stock’s 5.88% gain outperformed the S&P 500’s 17.2% YTD return, reflecting its unique positioning in the data center boom. However, NEE’s 2.32% decline highlights sector volatility amid divergent capital allocation strategies.

Options Playbook: Leverage AEP’s Bullish Momentum with Gamma-Driven Calls
• MACD: 1.24 (bullish divergence from 1.68 signal line)
• RSI: 31.22 (oversold territory)
• Bollinger Bands: Price at $121.88 (above upper band of $119.85)
• 200D MA: $106.56 (well below current price)
• Key Levels: 30D support at $117.32, 200D support at $107.48
AEP’s technicals suggest a short-term rebound after the bearish engulfing pattern, with RSI in oversold territory. The 200D MA at $106.56 provides a strong floor. Two options stand out for aggressive bulls:

1. AEP20251121C120
• Type: Call
• Strike: $120
• Exp: 2025-11-21
• IV: 18.17% (moderate)
• Leverage: 33.96%
• Delta: 0.668 (moderate sensitivity)
• Theta: -0.0647 (high time decay)
• Gamma: 0.0635 (high sensitivity to price moves)
• Turnover: $799K
This call offers 33.96% leverage with high gamma, ideal for a 5% upside scenario. Projected payoff: max(0, $127.98 - $120) = $7.98/share, or 66% return on premium.

2. AEP20251219C125
• Type: Call
• Strike: $125
• Exp: 2025-12-19
• IV: 18.26% (moderate)
• Leverage: 54.34%
• Delta: 0.392 (moderate sensitivity)
• Theta: -0.0368 (moderate time decay)
• Gamma: 0.0454 (high sensitivity)
• Turnover: $258K
This longer-dated call provides 54.34% leverage with high gamma. Projected payoff: max(0, $127.98 - $125) = $2.98/share, or 59% return on premium.

Action: Aggressive bulls should target AEP20251121C120 into a break above $122.79 (52W high). Conservative players may use AEP20251219C125 for a slower, higher-leverage play.

Backtest American Electric Stock Performance
I attempted to locate every date since 2022 on which American Electric Power (AEP.O) experienced an intraday surge of at least 6 percent, but the scan returned no qualifying days. While occasional 3-4 percent moves are common, a 6 percent intraday jump is quite rare for a defensive utility stock such as AEP. It appears there simply were no trading sessions that met the ≥ 6 percent intraday-high-versus-prior-close criterion during the period requested, so there are no events to back-test.Would you like to:1. Lower the surge threshold (e.g., 4 % or 5 %) to capture more events?2. Redefine the event (e.g., 6 % move from open-to-close rather than high-to-prior-close)?3. Examine a different stock or a different time span?Let me know how you would like to proceed, and I can rerun the extraction and back-test accordingly.

Bullish Momentum Intact – Key Levels to Watch for AEP's Next Move
AEP’s 5.88% surge is underpinned by a $72B capital plan and AI-driven demand, but technicals show a short-term bearish engulfing pattern. The 200D MA at $106.56 remains a critical support. If $122.79 (52W high) holds, the stock could test $127.98 (5% upside). Conversely, a breakdown below $117.32 (30D support) would trigger a retest of $107.48 (200D support). Watch NEE’s -2.32% move for sector sentiment cues. Aggressive bulls: Buy AEP20251121C120 into a break above $122.79.