Wall Street Journal reports utility stocks have underperformed since the Iran war began, yet they remain undervalued defensive plays. Historically considered safe havens, the sector now lags the S&P 500 by 3.5 percentage points after a 4% decline. This contrasts sharply with their 12-point outperformance during the Ukraine conflict. Vistra and Constellation Energy exemplify the AI-driven tech power shift, surging over 500% and 300% respectively since ChatGPT's launch, while broader utilities gained only 28% against the index's 56% rise. Four percent decline masks underlying value as regulated utilities provide essential services with stable cash flows.

Investors should reconsider these assets despite recent weakness.