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Utility stocks are booming – but why is Jim Cramer in love with this one (WTRG)?

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AI is the kind of once-in-a-century advancement that will change the way the world works forever. It has also created enormous opportunities for wealth building in sectors that provide AI-enabled logistics support. An example is the utility boom, driven in part by AI’s insatiable thirst for power. CNBC’s Jim Cramer recently shared his affection for one utility stock in particular. Keep reading to find out which ones and why.

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One of Jim Cramer’s most famous segments is his lightning round, in which he answers questions from investors who visit his show. When a caller asked about Essential Utilities (NYSE: WTRG), Cramer said emphatically, “It’s a great company… That’s a great stock.” So, what about Essential Utilities that Jim Cramer is so excited about?

According to its website, Essential Utilities is one of America’s largest publicly traded natural gas and water companies. It consists primarily of two companies, Aqua (water) and Peoples (natural gas), which provide services to more than five million customers in nine states. Water is a basic human need, giving Essential Utilities a permanently captive (and lucrative) customer base.

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However, it’s not the strength of Essential Utilities’ water business that has investors excited. Big Tech and data center developers are increasingly looking to natural gas as a potential energy source for AI. Natural gas offers several distinct advantages over traditional energy sources, most notably its ability to meet AI energy needs while having a smaller carbon footprint than coal and other fossil fuels.

This is becoming an increasingly important consideration as AI companies and data centers move closer to major cities and as the effects of climate change become more apparent. Peoples is the natural gas arm of Essential Utilities, which means they already have infrastructure in place to power AI operations and hyperscale data centers. It has more than 2.8 million miles of natural gas pipelines in the markets it serves in several states.

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