Surprise, surprise – UK utility stocks breaking out

One thing AI can’t really replicate is the provision of basic utilities. Can it, for example, provide clean water, electricity and install nation-wide power grid? No. So while AI may automate bookkeeping or chat with you online nonstop, it doesn’t pull copper wires to your property.

Perhaps for this reason, capital is switching to ‘real world’ companies.

In the UK, I noticed the many price breakouts in those “boring” utility stocks. These performances are somewhat unexpected. Who, amidst the AI/crypto boom last year, would have thought that UK water companies would outperform global techs like Oracle or Netflix? Very few.

Below, I highlight a few UK large-cap utility stock charts:

SSE Plc (SSE) – the £32 billion energy company has been on a roll since late last year. Prices broke through the 2,000p major level – and following a brief consolidation – are heading to new long-term highs again. Buying pressure remains strong.

Severn Trent (SVT) – the water company is enjoying a major upside breaking this year. Prices crossed north of the psychological 3,000p recently and are now challenging the major resistance at 3,200p – a level last seen in late 2021. When years of sideways consolidation give way to an uptrend, it tends to last for some time.

Centrica (CNA) – the owner of British Gas is amidst a long-term uptrend. Prices have appreciated nearly 4x since 2021 and are now probing the 200p resistance. As prices had rallied 70%+ last year, some consolidation may happen near this round number area.

United Utilities (UU.) – is surging to new all-time highs in the past few weeks. With no obvious technical barriers above, the path of least resistance remains up, although some overbought technicals are noted.

Even BT Group (BT.A), UK telecom group, has rebounded back to its 2025 highs. A major long-term upside breakout is potentially on the table should the upward pressure persists.

In sum, we are seeing an accelerated rotation into defensives sectors.