The hot ticker right now is OpenAI’s compute footprint, which is fueling everything from Oracle (NYSE:ORCL | ORCL Price Prediction) to NVIDIA (NASDAQ:NVDA) to a half dozen private power developers, and the consensus is that the only way to play the AI buildout is to pay nosebleed multiples for the names printing the headlines. But the real story is elsewhere.
A regulated Michigan utility most investors under 50 have never had a reason to think about just signed a 1.4 gigawatt data center power deal backed by Oracle and OpenAI, a contract potentially worth $7 billion over its life. The stock is DTE Energy (NYSE:DTE), and while everyone argued about GPU allocations, it quietly compounded 10% year to date. That is double-digit appreciation at low volatility.
The Crowded Trade You Already Own
The AI infrastructure trade is the most consensus position in the market. The Nasdaq 100 is up 20% year to date and 42% over the last year. Every retirement portfolio with an S&P index fund is already long the megacaps. Adding more exposure to Oracle or the hyperscaler complex at these multiples is buying the same risk twice, and doing it after a year where the headlines made the thesis legible to every cab driver in the country.
Power, by contrast, is the part nobody can ship overnight. You cannot 3D print a substation. The chokepoint of the AI buildout has shifted from chips to electrons, and the electrons live on regulated grids that take a decade to expand. I believe it could beat the Nasdaq in the coming years once the euphoria matures and long-term plays like energy keep climbing. You’d have to play the long game to make the most out of it, though.
Why a Sleepy Michigan Utility Is at the Center of It
DTE has three things working at once. First, the Oracle 1.4 GW agreement is already approved by the Michigan Public Service Commission and under construction, with a 19-year power supply term. Second, a separate 1 GW Google data center contract is in front of the MPSC, projected to generate roughly $1.70 billion in customer affordability benefits. Third, management has another 5 GW in advanced discussions with hyperscalers beyond Oracle.
That is a pipeline of contracted and prospective load. And because Michigan’s regulatory construct allows forward test years and a 10-month rate case cycle, the capital DTE spends to serve these customers earns a return on a predictable timeline. The five-year plan was just raised to $36.5 billion, with the Google project alone potentially driving $5 billion of incremental investment through 2032.
The Long-Cycle Setup Through 2030
Management’s official long-term EPS growth target is 6% to 8% through 2030. Jefferies thinks data centers push that to 8% or higher compound EPS growth through 2030. You get that growth at a forward P/E of 19x with a 3.16% dividend yield, roughly half the multiple of the AI names crowding the recommendation lists.
CEO Joi Harris framed it without drama on the most recent call: “As Michigan attracts new growth, including major investments like data centers, we are proud to support these opportunities to fuel Michigan’s economy and ensure our customers benefit from improved reliability and long-term affordability.” Hyperscalers pay to expand the grid, existing ratepayers get cheaper bills, DTE earns a regulated return on every dollar of capex. Everyone in the room wants the deal approved, which is the entire game in utility investing.
Wells Fargo’s price target sits at $160, and the consensus analyst target is $156 against a current price near $143. Put DTE on your research list before the second hyperscaler contract clears the Michigan Public Service Commission.
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