NVDA - NextEra Energy Could Be An Indirect Winner From AI
2024-06-13 13:00:00 ET
Summary
- NextEra Energy experienced a significant rally after hitting a 52-week low in 2023, with potential for long-term growth.
- NEE's strong position in the energy market, particularly in data center markets, makes it a compelling investment amidst the A.I. renaissance.
- Despite risks such as high debt and competition, NEE's dividend growth potential and expected EPS and revenue growth make it an attractive long-term play.
It’s been a wild ride for NextEra Energy ( NEE ) over the past year as shares dropped to a 52-week low of $47.15 in October of 2023 before staging a strong rally that exceeded $80 on May 31 st, 2024. NEE caught a massive bid coming out of the pandemic as shares propelled to their all-time highs at the end of 2021, and at one point, NEE was a larger company by market cap than Exxon Mobil (XOM). Despite the impact on NextEra Energy Partners ( NEP ) after cutting its growth guidance in 2023 and NEE deciding to hold off on the asset dropdown, NEE has continued raising the dividend while The Street expects YoY growth in EPS and revenue significantly increasing in 2024. NEE is currently retracing after hitting $80.47 the prior week, and shares could remain in a downtrend for a while, but I believe NEE is a strong long-term play on the growing energy demand from the Artificial Intelligence ((A.I.)) renaissance we’re experiencing. The amount of power required for the growing demand for chips is expected to expand, and NEE has a footprint that is critical to many of the major data center markets across the country. I am not currently a shareholder, but once this downward trend has established a bottom line, I plan on starting a position as I believe utilities are undervalued and that NEE will continue to be an earnings and dividend growth machine....
NextEra Energy Could Be An Indirect Winner From AI