Technology companies and the broader economy are transforming, moving away from fossil fuels as energy demand skyrockets backed by artificial intelligence. Major tech players like Microsoft are joining forces with nuclear energy and alternative energy firms to fuel their AI-centric expansion endeavors.
The landscape for nuclear energy stocks like Vistra and Constellation Energy is vibrant, with notable surges over recent years and months. Wall Street is bullish on companies driving America’s energy sector to meet the demands of AI and technological advancements.
Data centers are predicted to account for 10.9% of U.S. electricity consumption by 2030, a significant jump from the current 4.5% as highlighted by Citi analysts.
The U.S. power grid and energy ecosystem are undergoing a substantial revamp and expansion to accommodate the energy transition, electrification, and the AI revolution, marking the early stages of a multi-decade transformation.
In 2024, three of the top-performing S&P 500 stocks are nuclear energy entities and broader electrification players like Vistra, Constellation Energy, and GEV Vernova, showcasing their potential in today’s market.
Venturing into less mainstream avenues, let’s delve into two intriguing stocks — NextEra Energy and Flowserve, to capture the momentum of the AI-driven energy evolution encompassing nuclear power, electrification, and more.
The Strength of NextEra Energy in the Market
NextEra Energy, Inc. will unveil its Q3 2024 financial outcomes on Oct. 23 and is a flagship holding in the Utilities Select Sector SPDR Fund (XLU), overshadowing competitors such as Southern Co. and Constellation Energy. NextEra stock offers a chance to invest in a nuclear and energy titan currently trading 15% below its peak, waiting for a potential rebound after the surge of CEG and VST.
NextEra Energy boasts one of the largest electric utilities in the U.S., the Florida Power & Light Company, and stands as a major renewable energy producer in wind and solar energy fields. With a significant presence in battery storage and as a nuclear power plant owner, NextEra Energy is a key player in the energy landscape.
NextEra Energy owns nuclear plants across several states and is contemplating the revival of its Iowa nuclear facility, positioning itself strategically in the evolving energy market.
Riding the wave of increased demand for alternative, non-fossil fuel energy driven by AI advancements, NextEra Energy Resources experienced a record origination period in Q2, expanding their renewables and storage projects. Partnerships with Google further solidify their position in meeting data center energy requirements.
Projections indicate an anticipated 7% growth in adjusted EPS for NextEra in 2024, further escalating by 8% in 2025. The company has consistently exceeded EPS estimates over almost five years, setting a robust financial performance standard.
Emphasizing their commitment to financial excellence, CEO John Ketchum aims to maintain superior adjusted earnings per share through 2027, ensuring a strong balance sheet and credit ratings along the way.
With a remarkable 550% surge in the past 15 years, NextEra Energy outshines its industry peers in the Utility-Electric Power sector and surpasses the S&P 500 performance. The company’s resurgence since late 2023 heralds optimism among investors, anticipating further growth supported by lower rates and infrastructure developments in the energy domain.
Having ascended by 55% in the last 12 months, NextEra Energy’s recent correction positions it favorably for a potential breakout and the prospect of reaching new highs post-earnings.
Unveiling the Potential of NextEra and Flowserve Stocks
NextEra’s Strong Dividend Aristocrat Status
NextEra, known for trading in line with its 10-year median and at a 34% discount from its highs, stands as a beacon among the approximately 65 S&P 500 dividend aristocrat stocks. These firms boast a track record of not just paying but raising dividends for a minimum of 25 consecutive years.
With the possibility of any hurricane-related pullback offering investors a more favorable opportunity to delve into NextEra stock, the anticipation for a positive trajectory is palpable.
Why Flowserve’s Momentum in the Energy Sector is Unmissable
Flowserve Corporation, set to unveil its Q3 2024 financial results on Oct. 23, has been a force to be reckoned with in the nuclear and energy domain. Despite soaring 115% over the last two years, its current trading position reflects a 33% shortfall from its 2014 zenith.
With over a century of existence, Flowserve excels in developing precision-engineered flow control equipment vital for various industries. From pumps and valves to seals and energy recovery devices, Flowserve’s footprint spans critical service applications.
The company caters to diverse sectors such as power, chemicals, water, and oil & gas, with its power division poised for expansion as demand surges due to the proliferation of AI data centers.
Moreover, with certifications from several Generation III nuclear reactor design firms and a strategic focus on rare earth mining, Flowserve is strategically positioned for substantial growth aligned with the energy transition and infrastructure development.
Flowserve’s recent financial performance has been stellar, posting its highest quarterly bookings since 2014 and demonstrating a significant uptick in sales year over year. Projected growth in both sales and earnings cements its promising outlook in the market.
Trading at 52-week highs and boasting an impressive earnings growth forecast for the coming years, Flowserve is primed for a potential breakout in the market. The sky seems to be the limit as it charts a course towards reclaiming its previous peaks with a renewed sense of purpose.