Williams Companies Stock Soars on AI Power Demand. Is It Too Late to Get In?
Williams Companies has handed investors a 30% gain over the past year, fueled by AI power demand that is barely getting started. Before deciding the rally already ran its course, consider what the company's pipeline network and behind-the-meter power projects…
Williams Companies (NYSE:WMB | WMB Price Prediction) shares have climbed 30.1% over the past year as investors price in power demand from AI data centers. This morning, the stock rose another 2.7% to $73.09 after third-quarter results. It is up 24.3% year to date and 222.3% over five years. If you watched that run from the sidelines, it makes sense to wonder whether you missed it. The evidence points to further growth drivers ahead.
A Quarter That Kept the Growth Story Intact
Williams reported adjusted EPS of $0.54, just ahead of the $0.5386 consensus estimate. Revenue of $3.2 billion beat expectations by 10.1%. Adjusted EBITDA, a measure of operating cash earnings before interest, taxes, and non-cash charges such as depreciation, came in at $2.04 billion, up 6% from a year earlier.
Williams said it is on track to reach the upper half of its 2026 adjusted EBITDA guidance range of $8.3 billion to $8.5 billion. CEO Chad Zamarin confirmed a long-term adjusted EBITDA compound annual growth target of 11% or more through 2030.
Valuation Is Full, but Wall Street Still Sees Room
The stock trades at a forward P/E of about 28, which is a premium for a pipeline operator. Investors pay that premium for steady, fee-based revenue from regulated transportation and storage, gathering and processing, and power generation services. The company says its pipelines move about one-third of U.S. natural gas.
Analysts remain supportive. The consensus price target of $85.38 stands more than 16% above the current price. Sentiment is positive. The shares trade about 7.4% below their 52-week high of $78.92 and well above the low of $54.53.
Power Projects Could Keep the Rally Going
Behind-the-meter power means generating electricity on site for one large customer, such as a data center, without routing it through the utility grid. Socrates is Williams’ first project of this kind. Zamarin said in the earnings release:
I am especially proud of our team’s exceptional execution to bring Socrates fully online ahead of schedule. As the first of many power projects, Socrates demonstrates our ability to deliver fast, reliable and scalable solutions for customers facing rapidly growing power demand, and we are actively working to commercialize additional power projects, which we expect to announce soon.
The Plato North Power project is on track to enter service by mid-November. Williams also closed its $2.82 billion Momentum Midstream acquisition ahead of schedule, expanding in the Haynesville, which the company calls America’s fastest-growing natural gas basin. The Department of Energy projects data centers could account for up to 12% of U.S. electricity demand by 2028. (All of that load has to be powered by someone, which is why pipeline and infrastructure names keep showing up alongside the chipmakers in our free report on seven stocks powering the AI boom.)
Downside Risks Income Investors Should Weigh
Capital expenditures jumped 159.0% year over year in the quarter, and Williams expects 2026 growth capex of $7.3 billion to $7.9 billion. Leverage, measured as debt divided by adjusted EBITDA, shows how many years of cash earnings it would take to repay debt. It rose to 3.80x from 3.73x. Steel tariffs, construction cost inflation, and permitting delays could raise costs or push back project dates, and rising interest rates tend to weigh on income stocks like this one.
The dividend offers a buffer. Williams’ 2026 guidance midpoint for dividend coverage, which compares available cash flow to dividend payments, is 2.47x. The annualized dividend of $2.10 was raised 5% for 2026, extending a 52-year record of consecutive payments.
Verdict: What Income Investors Should Track Next
Several factors support the outlook. A full valuation is supported by guidance moving toward the high end, a power business that is just starting to produce revenue, analyst targets above the current price, and a dividend covered more than twice over. Rising leverage and heavy capital spending warrant patience, though those costs fund the very projects driving the growth. Income-focused investors who missed the run can put Williams on their research list and keep an eye on the stock as its power projects come online.
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Trey has been an editor and author at 24/7 Wall St. for more than a decade, where he has published thousands of articles analyzing corporate earnings, dividend stocks, short interest, insider buying, private equity, and market trends. His comprehensive coverage spans the full spectrum of financial markets, from blue-chip stalwarts to emerging growth companies.
Beyond 24/7 Wall St., Trey has created and edited financial content for Benzinga and AOL's BloggingStocks, contributing additional hundreds of articles to the investment community.
Trey's editorial expertise extends across multiple publishing environments. He served as production editor at Dearborn Financial Publishing and development editor at Kaplan, where he helped shape financial education materials. Earlier in his career, he worked as a writer-producer at SVE. His freelance editing portfolio includes work for prestigious clients such as Sage Publications, Rand McNally, the Institute for Supply Management, the American Library Association, Eggplant Literary Productions, and Spiegel.
Outside of financial journalism, Trey writes fiction and has been an active member of the writing community for years, moderating workshop sessions at regional conventions.
