Inquiring about NextEra Energy, Inc. (NYSE:NEE) on October 1, a caller asked if the company was electric, and Mad Money host Jim Cramer replied:
It’s electric, but no, I don’t want to own that stock. As a matter of fact, I’ve been right to avoid that stock. And so, I’m going to double down and say I really want to avoid it.
Cramer maintained a bearish sentiment on the stock during the September 16 episode as well.
Power Development Expands Beyond Renewables
NextEra Energy, Inc. has continued expanding its electricity-generation pipeline. On September 30, the company announced its involvement in Project Star, a planned approximately $22.3 billion energy campus in Texas. NextEra Energy Resources and Related Companies, working with Lewis Energy Group, plan to develop, build and operate 6.47 gigawatts of natural gas generation. The campus is intended to supply an adjacent 5-gigawatt data center development and send excess electricity to the grid. However, the announced investment covers the project rather than NextEra’s individual spending commitment.
Its existing businesses also reported growth. Second-quarter adjusted earnings per share increased to $1.15 from $1.05 a year earlier. Florida Power & Light’s net income rose to approximately $1.4 billion from $1.3 billion, supported by infrastructure investment. NextEra Energy Resources added 3.6 gigawatts of renewable-energy and storage projects to its backlog, including 2 gigawatts of battery storage. After accounting for projects entering service, the backlog stood at approximately 35.1 gigawatts.
Merger Scrutiny and Heavy Investment Requirements
The proposed approximately $66.8 billion combination with Dominion Energy introduces a substantial regulatory undertaking. Shareholders approved the transaction in September, but state and federal approvals remained outstanding. Virginia Governor Abigail Spanberger sought commitments concerning electricity bills, employment and clean-energy investment, while Maine Governor Janet Mills raised concerns about competition and control over regional energy assets.
The companies subsequently offered additional Virginia commitments, including extending monthly residential bill credits to four years and maintaining existing employment levels for five years. These concessions form part of the approval process for a transaction expected to close in late 2027, subject to regulatory clearance.
NextEra Energy, Inc.’s expansion also requires substantial funding. During the first half, consolidated operating cash flow was approximately $7.3 billion, while FPL capital expenditures and NextEra Energy Resources’ independent-power and other investments totaled approximately $19.1 billion. Those investment outlays exceeded internally generated operating cash.
Hedge Fund Participation Rises Despite Cramer’s Caution
NextEra Energy, Inc. appeared in 80 hedge fund portfolios tracked by Insider Monkey at the end of the second quarter, compared with 74 in the prior quarter. That increase contrasts with Cramer’s reluctance to own the shares, although the holdings predate his October remarks. Short interest represented 2.71% of the public float, indicating some bearish positioning without an unusually large concentration of shares sold short.
NextEra continues to grow earnings and secure new power projects, even as Cramer remains against owning the stock. Its opportunities come with substantial spending needs, while the Dominion merger still requires regulatory approval. Investors should weigh against those commitments, with both project delivery and the merger review still ahead.
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