State Street Utilities ETF offers defensive, growing clean energy exposure tied to AI power demand.

The State Street Utilities Select Sector SPDR ETF (XLU) provides investors with defensive exposure to utilities while increasingly benefiting from the growth in clean energy, especially as AI-driven power demand rises. Its top holdings are securing long-term clean energy deals with major tech firms, positioning XLU as a proxy for AI infrastructure growth. Although current valuations are fair, forward price-to-earnings ratios suggest these stocks may become undervalued by 2027, supporting a medium-to-long-term investment case. Additionally, XLU's dividend yield and historical total returns make it attractive for long-term investors despite its slower price growth compared to pure clean energy or AI-focused ETFs.