Artificial intelligence (AI) may sound like a software story, but the real bottleneck could be electricity. Data centres need steady power, grid connections, transmission capacity, backup systems, and years of utility planning. This creates a different kind of AI-era winner: not just chipmakers, but regulated utilities that own the wires.
That’s why today, we’re going to look at one company powering Canada’s most populated province, with plans to expand for not just the next few years, but decades.
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Hydro One (TSX:H) could be a major winner for the AI power roll out. It owns and operates most of Ontario’s electricity transmission system and a large local distribution network, moving electricity from generators to communities, businesses, homes, factories, and major power users.
Data centres don’t just need land and servers. They need grid access, reliable transmission, and enough capacity to run 24/7. Ontario has already taken steps to prioritize electricity connections for data centres that support provincial economic goals, including domestic data hosting and digital growth. This makes Hydro One stock a utility for the AI era, even though it doesn’t operate data centres itself.
Recent news
The last year saw a focus on grid investment, reliability, and leadership change for Hydro One stock. Q1 2026 results also showed higher demand helping the business. First-quarter earnings per share (EPS) rose to $0.65 from $0.60 a year earlier, helped by Ontario Energy Board-approved rates and higher peak demand. Q1 also included $715 million in capital projects and $484 million of assets placed in service.
Recent earnings weren’t surging tech numbers, but dependable. Earnings per share (EPS) rose about 8.3% year over year to $0.65. Net income attributable to common shareholders rose 9.2% from the prior year. Revenue net of purchased power increased 3% year over year, while transmission revenue rose 4.4%. That last part is important, as transmission is directly related to grid expansion and new load.
Future focus
But is it worth it? Hydro One stock isn’t some undervalued play, but it’s not overvalued either. Quality utilities rarely are. The stock has typically traded at a premium because of its regulated earnings, Ontario footprint, and steady dividend. Most recently, it traded at 25.4 times earnings, with a 2.4% dividend yield, which alone could create ample income with $7,000 invested.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | ANNUAL DIVIDEND | ANNUAL TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| H | $57.51 | 121 | $1.41 | $170.61 | Quarterly | $6,958.71 |
But the future looks even brighter, starting with Ontario’s growing electricity needs. AI, data centres, electric vehicles, housing growth, industrial expansion, and manufacturing investment all need grid capacity. In fact, one Ontario electricity analysis said the province expects 16 more data centres to connect to the grid over the next 10 years, representing 13% of new electricity demand. So really, Hydro One stock’s story has only begun.
Foolish takeaway
Every data centre needs power, but the bigger opportunity sits in the grid upgrades required to connect and serve that demand. Hydro One stock has a regulated model, large Ontario footprint, and multibillion-dollar capital plan.
This won’t move like an AI software stock, and it carries regulatory, political, interest-rate, and storm-cost risks. Furthermore, higher demand does not automatically mean higher profit unless regulators approve spending and rates.
However, AI has created a rush for chips, servers, and cloud capacity, but electricity may prove just as important. Hydro One gives investors a calmer TSX way to invest in that theme. For investors looking beyond the obvious AI names, Hydro One stock could be one Canadian utility built to benefit from the power demands of the next decade.
