There’s more than one way to own a piece of the artificial intelligence sector. Skip the vendors of chips and large language models. Invest in the power supply.

Shares of electric utilities under contract with giant data centers are sizzling. The past three years have seen a doubling for Entergy, a quadrupling for Constellation Energy and a sixfold gain for Talen Energy.

Riding this electric wave is Jay Rhame, chief executive of W.H. Reaves & Company, a somewhat obscure money manager in Jersey City, New Jersey, that has an uncommon focus: utilities. Its Virtus Reaves Utilities ETF has, since opening in 2015, raced ahead with a 14.5% annual return, three points ahead of the Morningstar utilities category. A key element of Reaves’ success: antici­pating which power producers will benefit from AI electric demand.

Rhame totes up the wins: Entergy is building a custom plant for Meta Platforms in gas-rich, regulation-light rural Louisiana. Constellation has a deal with Microsoft to power computers with a resurrected nuclear plant at Three Mile Island. Talen Energy, a once-bankrupt power producer spun out of Pennsylvania Power & Light, is going to sell output from the Susquehanna nuclear plant to Amazon. The Reaves exchange-traded fund has ridden all three to big gains.

It once was that utility shares had nothing to offer but dividends—large but stagnant. AI changed that. A collection of semiconductors used to make computers smart can easily draw one or two gigawatts of electricity, enough to power a city. “The growth outlook for utilities is probably the best it’s........

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