TD Cowen Maintains Buy Rating for AEP Following Data Center Demand Growth

TD Cowen reiterated its Buy rating on American Electric Power (AEP) and maintained a price target of $149.00. The utility firm is currently managing an influx of electricity demand driven by data center expansion. The firm's outlook focuses on AEP's ability to capitalize on infrastructure needs that have exceeded initial expectations.

"AEP once again showed its impressive pipeline of capital opportunities in its operating regions and execution continues to show marginal improvements to earned ROEs," said Shelby Tucker, analyst at TD Cowen, in a February 2026 report.

Demand Backlog and Capital Spending

The scale of demand growth appears in AEP’s reported electricity demand backlog. This figure rose from 22 gigawatts in Q3 2025 to 69 gigawatts by Q2 2026. This increase in required capacity is forcing a reassessment of long-term capital requirements for the utility provider.

TD Cowen analysts anticipate an increase in AEP's five-year capital spending program when the company updates its figures in Q3 2026. This plan is expected to exceed the $78 billion investment roadmap outlined in Q3 2025, as the company adds infrastructure to support data centers.

Earnings Guidance and Financial Outlook

Reflecting this operational momentum, AEP raised its 2026 operating earnings guidance. The company now expects earnings to fall within a range of $6.25 to $6.55 per share, up from the previous guidance of $6.15 to $6.45 per share.

For investors, the shift in AEP's financial outlook highlights the trend of utilities acting as infrastructure partners for the technology sector. As data center operators demand higher reliability and capacity, utilities like AEP are moving from traditional rate-base growth models toward accelerated investment cycles. This shift changes the risk-reward profile of the sector.