Artificial intelligence (AI) is turning the power grid into one of the biggest investment stories of 2026. Data centres need huge amounts of electricity to run chips, servers, cooling systems, and backup power. In fact, Canada just unveiled a plan to double electricity-grid capacity by 2050, tied to rising power demand and energy security.
What’s more, the U.S. Energy Information Administration expects U.S. power use to hit record highs in both 2026 and 2027 as AI data centres, crypto, heating, and transportation electrification lift demand. This has moved investment strategies from just tech stocks to a power-generation story, a grid story, and a cash-flow story. So let’s look at two stocks that could benefit.
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TA
TransAlta (TSX: TA) is one of Canada’s largest publicly traded power generators. It produces and sells electricity across Canada, the United States, and Western Australia and includes hydro, wind, solar, natural gas, energy storage, and energy-marketing operations. Recent news over the last year included the acquisition of Far North for $95 million, adding 310 megawatts (MW) of gas-fired capacity.
The latest quarter was mixed but still cash-generative. In Q1 2026, TransAlta reported revenue of $565 million, down from $758 million a year earlier. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) came in at $204 million, down from $270 million. Free cash flow was $102 million, or $0.34 per share, compared with $139 million, or $0.47 per share, a year earlier. Net earnings attributable to common shareholders were $13 million, or $0.04 per share, compared with $46 million, or $0.15 per share, in Q1 2025. So softer, but not broken.
Yet don’t let that fool you. TA reaffirmed 2026 guidance, targeting $950 million to $1.05 billion in adjusted EBITDA and $350 million to $450 million in free cash flow. It raised its annualized dividend by 8% to $0.28 per share, now yielding about 1.6% at writing. So while you’re earning income, TA offers something AI builders desperately need: power that shows up when called.
BEP
Then we have the tycoon of the industry: Brookfield Energy Partners LP (TSX: BEP.UN). BEP stock is the cleaner global power-growth pick owning hydro, wind, solar, distributed energy, and storage assets across major markets. Over the last year, BEP stock stayed active in Canada’s renewable sector through its role in the Boralex privatization.
The latest results were strong. In Q1 2026, Brookfield Renewable generated record funds from operations (FFO) of US$375 million, or US$0.55 per unit, up 19% overall and 15% per unit year over year. Furthermore, BEP stock committed US$2.2 billion to growth investments, including the Boralex privatization and 1.8 gigawatts of new capacity. It also generated nearly US$3 billion in asset-recycling proceeds, with about US$800 million net to Brookfield Renewable.
BEP stock has already had record results before AI power demand fully plays out. Now it looks highly valuable, with a strong outlook. Shares are up 37% in the last year, with the stock now trading at 1.6 times sales. So not cheap, but it does offer a 4.6% dividend yield after a recent 5% increase. In short, BEP stock brings global scale, contracted cash flows, and a huge renewable platform at the exact moment electricity demand is becoming scarce.
Bottom line
AI may look digital, but its next bottleneck looks physical. The servers need power. The power needs generation. The generation needs capital. Both of these offer this up and more, with dividends to boot. In fact, here’s what $7,000 could bring in.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | ANNUAL DIVIDEND | ANNUAL TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| BEP.UN | $46.50 | 150 | $2.13 | $319.50 | Quarterly | $6,975.00 |
| TA | $17.38 | 402 | $0.28 | $112.56 | Quarterly | $6,986.76 |
In short, if AI keeps driving a power boom, TA and BEP stock are two TSX stocks worth watching before the market fully prices in the electricity story.
