ONEOK: A Midstream Buy Opportunity in a Fragmented Energy Landscape

The midstream energy sector, long undervalued amid shifting market dynamics, is poised for a renaissance driven by two transformative forces: strategic consolidation and the exponential energy demands of artificial intelligence (AI). ONEOK (OKE), a leading player in this space, has emerged as a compelling investment opportunity, combining robust financial performance, a resilient dividend yield, and a forward-looking infrastructure strategy aligned with the AI revolution.

Q3 2025 Earnings: A Testament to Operational Resilience

ONEOK's third-quarter 2025 results underscore its ability to capitalize on strategic acquisitions and operational efficiency. The company reported net income of $940 million, or $1.49 per diluted share, marking a 26.3% year-over-year increase and surpassing estimates by 2.1%. Adjusted EBITDA surged to $2.12 billion, fueled by the EnLink and Medallion acquisitions, as well as a 17% rise in Rocky Mountain NGL raw feed throughput volumes and a 6% increase in Mid-Continent volumes. These gains highlight ONEOK's contiguous asset integration and its capacity to scale operations in high-growth regions.

While quarterly revenues of $8.63 billion fell slightly below forecasts, the 71.9% year-over-year revenue jump reflects the compounding benefits of recent acquisitions and elevated NGL processing demand. This performance reaffirms ONEOK's guidance for 2025 adjusted EBITDA, which remains unchanged despite macroeconomic headwinds.

A 5.69% Dividend Yield and AI-Driven Growth Catalysts

ONEOK's financial strength is further evidenced by its 5.69% dividend yield, one of the most attractive in the energy sector. The company's October 2025 dividend declaration of $1.03 per share, annualizing to $4.12, underscores its commitment to shareholder returns. This yield, combined with an AI score of 71-a-metric reflecting strong financial growth, operational resilience, and positive alternative data trends-positions OKE as a rare blend of income and growth.

The AI score's significance lies in its alignment with broader energy trends. As AI workloads and cloud infrastructure demand surge, hyperscale data centers are increasingly locating near energy infrastructure hubs to ensure reliable, cost-effective power. ONEOK's midstream assets, including its NGL pipelines and processing facilities, are uniquely positioned to meet this demand. For instance, the company's 17% increase in Rocky Mountain NGL throughput directly supports the energy needs of data centers in regions like Texas and Colorado, where AI clusters are expanding.

Strategic Consolidation and the AI Energy Transition

ONEOK's consolidation strategy-exemplified by its EnLink and Medallion acquisitions-has created a diversified, fee-based revenue model less susceptible to commodity price volatility. These acquisitions have expanded its footprint in key NGL corridors, enhancing its ability to serve both traditional industrial clients and emerging AI-driven energy consumers.

The AI-driven energy transition is a critical long-term catalyst. According to a report by Seeking Alpha, AI workloads require 3-5 times more electricity than conventional computing, with hyperscale data centers consuming as much energy as small cities. ONEOK's infrastructure, which includes 23,000 miles of pipelines and 15 processing plants, is well-suited to supply the natural gas and NGLs needed to power this transition. Moreover, its fee-based contracts provide stable cash flows, insulating the company from short-term market fluctuations while aligning with the decade-long capital intensity of AI infrastructure development.

A Compelling Investment Thesis

The midstream sector remains undervalued relative to its long-term potential, with ONEOK offering a rare trifecta of yield, growth, and strategic positioning. Its Q3 2025 results demonstrate operational excellence, while its 5.69% yield provides immediate income. The AI score of 71 and its infrastructure expansion further validate its role in the energy transition, making it a defensive yet growth-oriented play in a fragmented energy landscape.

For investors seeking exposure to the AI-driven energy boom, ONEOK represents a low-risk, high-conviction opportunity. With its guidance intact, dividend intact, and infrastructure primed for the future, OKE is not just a midstream stock-it's a bridge to the next energy era.