2. NextEra Energy, Inc. (NYSE:NEE)
Number of Hedge Fund Holders: 73
NextEra Energy, Inc. (NYSE:NEE) is the world’s largest producer of wind and solar energy, as well as a leader in battery storage technology. The company’s operations are divided into two main businesses. The first is Florida Power & Light (FPL), an electric utility company. The second is NextEra Energy Resources (NEER), one of the world’s largest producers of alternative energy and a leader in battery storage. NEER focuses on the development, construction, and operation of long-term energy assets, primarily in the U.S. and Canada. NEER manages an alternative energy portfolio of approximately 34 GW, including 24 GW from wind energy, 7 GW from solar energy, and 2 GW from nuclear energy. Additionally, NEER has 1 GW of battery storage capacity spread across 16 U.S. states.
In Q3, NextEra Energy, Inc. (NYSE:NEE) demonstrated compelling growth and resilience across multiple facets of its business, with an approximate 10% year-over-year increase in adjusted earnings to $2.12 billion, or $1.03 per share. The company’s Energy Resources division boasted an 11% increase in adjusted earnings year-over-year. NextEra Energy, Inc. (NYSE:NEE) is exploring restarting Iowa’s Duane Arnold nuclear plant, driven by heightened demand from data centers. In their Q3 earnings call, John Ketchum, Chairman, President, and Chief Executive Officer of NextEra Energy, Inc. (NYSE:NEE) said that the Duane Arnold is a 601 MW boiling water reactor (BWR) plant, which is generally less complex and expensive to recommission than pressurized water reactors (PWRs). The company expects to execute it at an attractive price and without much risk. NextEra Energy, Inc. (NYSE:NEE) is conducting engineering assessments and working with the U.S. Nuclear Regulatory Commission (NRC) on a potential restart due to strong interest from data center customers.
NextEra Energy, Inc.’s (NYSE:NEE) nuclear power capacity factor aligns well with the reliability needs of data centers, which can deliver reliable energy solutions that meet the growing demands of a digitalized economy and positions the company as a strong contender for data centers seeking reliable and alternative energy solutions. The company’s strategic investments in alternative energy, combined with its ability to leverage AI and capitalize on market trends, present an appealing opportunity for investors looking to benefit from the ongoing energy transition. In its Q2 investor letter, ClearBridge stated the following regarding NextEra Energy, Inc. (NYSE:NEE):
“AI-related momentum was a key driver of performance in the second quarter, lifting the enablers in technology as well as holdings like alternative power producer NextEra, Inc. (NYSE:NEE) that supply the increasing energy needs of data centers. Parts of the market lacking an AI connection, like our medical device holdings, underperformed despite no change to fundamentals. We have managed through several similar momentum periods over our tenure and have delivered long-term results for shareholders by staying true to an approach that emphasizes diversification across three buckets of growth companies (select, stable and cyclical) and seeks to take advantage of attractive entry points into quality growth businesses.”
