Utility stocks are generally not the types of investments that make people happy. These businesses are stable, boring, and built to last. However, sometimes a utility makes a move that changes the entire growth conversation. OGE Energy (OGE) recently made that kind of move.
Based in Oklahoma City, Oklahoma, the company announced on April 30 that its subsidiary, OG&E, will power three new data centers for Alphabet’s ( GOOGL ) Google. These data centers will be located in Muskogee, Oklahoma and Stillwater, Oklahoma.
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The deal is built on strong customer protection and long-term contracts – and comes after a strong first-quarter earnings report that confirmed management’s confidence in the year ahead. Here’s what investors should know about OGE stock now.
Why Utilities are Winning the AI Power Race
Artificial intelligence (AI) development requires large amounts of electricity as data centers require reliable, affordable power delivered at scale. That reliable power is what OG&E has been quietly building for years, and its rates are “some of the lowest in the country” according to CEO and President Sean Trauschke.
Residential electricity prices in Oklahoma are 19% below the state average and 34% below the national average. Over the past decade, electricity demand across the company’s system has grown by 25%, while residential property price increases have been below inflation. That combination of low costs and growing demand is a compelling signal for companies like Google, which need to offset long-term, predictable energy costs at large facilities.
Trauschke made it clear on the company’s Q1 2026 earnings call: “We continue to believe that our state values are very valuable in driving new business that we will defend.”
What Does the Google Deal Mean for OGE Stock?
The terms of this agreement should be understood, as they are structured differently from those of a normal employment contract. Google will pay 100% of the cost of connecting all three data centers to the grid. It will also cover “all costs of the contract regardless of the use of the company’s capacity.” Additionally, Google is bringing to the table 600 megawatts of nameplate solar capacity from two solar facilities currently under construction. The bill protects existing taxpayers, which is what state regulators and the Oklahoma legislature have been pushing for.
Trauschke called it a model of how the next supercharged relationship should work. “This unique agreement exemplifies the future of data center partnerships and lays the groundwork for the new large load tariff that OG&E will deliver in the coming weeks,” he said. The CEO added that the agreement protects current customers from bearing the costs associated with increased demand.
The deal still needs to be approved by the Oklahoma Corporation Commission. The company expects to file an application in the coming days.
Strong Performance in Q1
In Q1 2026, consolidated earnings came in at $0.24 per diluted share, down from $0.31 in the same period last year, primarily due to cooler weather. However, management reaffirmed full-year guidance of $2.43 per share, with a range of $2.38 to $2.48. According to Trauschke, Q1 typically represents only about 10% of OGE’s annual revenue, so the weather-related softness isn’t alarming.
Customer growth has remained just under 1% over this period, and load growth over the past five years has been nearly 24%. CFO Chuck Walworth confirmed the company’s profit growth target in the 5% to 7% range, pointing to the upper half of that range over the next few years.
The Google deal, a major upcoming battery storage project called Frontier Energy Storage, and a significant transmission line opportunity together extend OGE’s growth trajectory beyond the current planning period. “Catalysts are there to extend that expectation,” Walworth said on the lead call.
Moody is paying attention, too. It recently upgraded OGE Energy’s credit rating from negative to stable, citing a positive regulatory framework and a strengthened balance sheet.
What Do Analysts Think About OGE Stock?
For investors looking for a utility with a real catalyst nearby and a long path to demand-driven growth, OGE stock is worth putting on the radar right now.
Analysts forecast OGE stock to expand adjusted earnings from $2.32 per share by 2025 to $3.24 per share by 2030. If the utility’s stock is valued at 17.3 times forward earnings, similar to its 10-year average, it could rise 17% from current levels over the next four years.
Of the 13 analysts covering OGE stock, four recommend a “Strong Buy” rating while nine recommend “Hold,” resulting in a consensus “Average Buy” rating. The average price target is $50.59, which implies a potential upside of 6% from current levels.
As of the date of publication, Aditya Raghunath had no (directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is for informational purposes only. This article was originally published on Barchart.com
