Goldman Sachs Backs Gas Stocks, 11 bcf/d
Goldman Sachs’ utilities and power research team has upgraded its outlook for natural‑gas‑fired power generation, projecting daily natural‑gas demand growth of 10‑11 billion cubic feet (bcf) from 2025 through 2030, a revision from the earlier estimate of 7‑8 bcf per day released earlier this year. The upward revision follows a separate update that lifted the 2030 data‑center power‑consumption forecast by roughly 30 percent, raising the total to 108 gigawatts (GW) from the previous 83 GW.
The bank notes that mid‑stream pipeline volumes have fallen about 12 percent since their mid‑May peaks, creating what it describes as an attractive entry point for investors seeking exposure to the anticipated demand surge. In this context, Goldman Sachs highlighted three mid‑stream and power‑generation companies as potential beneficiaries.
Williams Companies Inc (WMB) – The firm is rated a top buy, with Goldman Sachs emphasizing its role in expanding natural‑gas transmission infrastructure needed for growing data‑center power generation. Williams reported second‑quarter revenue of $3.05 billion, surpassing analyst expectations, while adjusted earnings were in line with forecasts. Following the earnings release, RBC Capital raised its price target on the stock.
Kinder Morgan Inc (KMI) – Maintained at a buy rating, Kinder Morgan is viewed as well‑positioned to capture additional gas demand from data‑center power projects, with the pipeline network’s latent capacity remaining tight. Goldman Sachs estimates an average upside of about 11 percent to price targets across its pure‑play coverage, and Kinder Morgan’s own second‑quarter results beat Wall Street estimates on both profit and revenue, prompting the company to raise its full‑year financial guidance.
Kodiak Gas Services Ltd (KGS) – Identified as a behind‑the‑meter power provider, Kodiak Gas is trading at levels that Goldman Sachs believes imply little current value for its power business. The bank cites commercial execution as the next hurdle, noting that turbine equipment has become easier to procure. It expects large project announcements in the second half of 2026 to act as upside catalysts. Kodiak reported second‑quarter revenue of $391.1 million, exceeding analyst forecasts, and Stifel increased its price target on the stock.
Overall, Goldman Sachs sees the convergence of rising data‑center electricity demand and constrained mid‑stream capacity as a catalyst for natural‑gas‑related equities, recommending selective exposure to companies positioned to benefit from new pipeline projects and power‑generation opportunities.