Goldman’s Hidden Energy Bet: Dividend-Paying Data Center Power Plays Quietly Compounding
Wall Street’s attention has been laser-focused on AI hardware — Nvidia, data center REITs, the hyperscalers themselves. But Goldman Sachs just quietly pointed long-term investors toward a more overlooked corner of the energy infrastructure world: midstream natural gas companies that are powering data centers from behind the meter, and paying dividends that crush the S&P 500’s current 1.04% yield while they do it.
Goldman’s latest “Ten Buys” list of energy and power stocks names Kodiak Gas Services (KGS) and The Williams Companies (WMB) as the standout plays in its data center and power growth theme. Kodiak, a Texas-based natural gas compression specialist, is expanding rapidly into behind-the-meter power generation — supplying electricity directly to data centers without running through the local grid. Goldman sees roughly 15% EBITDA growth through 2030, driven by that expansion. The stock has already climbed nearly 75% year to date, yet Goldman’s $89 price target still implies more than 36% additional upside from recent levels. All 15 analysts covering the stock rate it a buy or strong buy, per LSEG. The dividend yield stands at 3% — nearly three times the S&P 500’s payout.
Williams Companies, meanwhile, operates one of the country’s most critical natural gas pipeline networks and is quietly diversifying into the same behind-the-meter opportunity. In May, Williams announced three new AI-era infrastructure projects: Neo, a behind-the-meter agreement with a major hyperscaler; Atlas, a gas infrastructure deal to serve a large investment-grade data center in the Northeast; and Silver Spur, an expansion of its Northwest Pipeline system. Goldman’s $82 price target suggests roughly 12% additional upside, with 20 of 25 covering analysts calling the stock a buy or strong buy. The dividend yield: 2.8%. Shares are up 24% year to date. The broader Goldman energy list also includes ConocoPhillips yielding 2.8%, Marathon Petroleum at 1.3%, and Expro Group at 1.9%.
For long-term investors, the real insight here isn’t a trade — it’s a structural shift. Natural gas infrastructure companies have historically been valued as slow-growth, income-generating pipelines. The AI buildout is repricing that thesis. Behind-the-meter power generation creates a new, high-margin revenue stream for midstream operators who already own the pipes and the compression equipment. That’s compounding on top of compounding: existing pipeline cash flows fund dividends while new data center contracts layer in incremental EBITDA growth. Goldman’s conviction that “the market continues to underestimate the number of future behind-the-meter wins” for Williams in particular echoes a classic pattern — a durable moat getting a new growth driver that most investors haven’t fully priced in. Patient investors who can hold through the AI noise and focus on the underlying cash flows may find these energy infrastructure names among the more durable compounders of the current decade.
