Impact of AI Bubble Popping on Electric Utilities and Pinnacle West
ByAinvest
Tuesday, Dec 2, 2025 1:34 pm ET1min read
PNW--
The article discusses the potential impact of the AI bubble popping on electric utilities, such as the Utilities Spider ETF (XLU) and Pinnacle West (PNW). The authors argue that while electric utilities are not part of the AI bubble, they benefit from the increasing demand for electricity driven by AI. The authors explore three possible scenarios for the AI bubble popping: failed ROIC of technology, intense rivalry with lowered barriers to entry, and low ROIC but necessary spending to remain relevant. They conclude that paths 2 and 3 would not significantly impact demand for electricity, while path 1 would be negative for electric utilities.
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