NextEra Energy, Inc. (NYSE:NEE) and Duke Energy Corporation (NYSE:DUK) have returned -13.29% and -6.77%, respectively, over the last six months, as of October 15. This compares to a 21.5% return for the Insider Monkey Billionaire Index and 15.74% for the State Street SPDR S&P 500 ETF Trust.
Both NextEra Energy and Duke Energy stand to benefit from rising electricity demand, but the two companies are going about it differently. NextEra has more room to grow through renewables, battery storage, and the growing demand for power from data centers. Duke, on the other hand, is a more traditional utility.
However, building that infrastructure to meet rising demand takes enormous amounts of capital. The companies that benefit most will not necessarily be the ones with the biggest growth forecasts, but those that can turn investment into earnings without putting too much pressure on their balance sheets.
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Growth: NextEra Has the Edge
NextEra Energy, Inc. ’s business has two main engines. Florida Power & Light provides a regulated utility business that benefits from population growth, while its Energy Resources division develops renewable energy, battery storage, and other power infrastructure.
The combination gives NextEra several ways to meet rising electricity demand. In its second-quarter 2026 earnings call, management reported that adjusted earnings per share had increased 9.8% year over year in the first half. It also raised its expectations for large-load demand at Florida Power & Light from 6 GW to 8 GW by 2032. Meanwhile, its renewable energy and storage backlog reached approximately 35.1 GW.
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Duke is benefiting from the same broad trend. Its service territories across the Southeast and Midwest are attracting businesses, including data center operators, that need reliable electricity. The company has secured 7.8 GW of electric service agreements with data center customers and is expanding its generation capacity to meet demand.
Duke’s second-quarter adjusted earnings per share rose to $1.43 from $1.25 a year earlier. Management reaffirmed its target for annual earnings-per-share growth of 5% to 7% through 2030, with growth expected to accelerate from 2028 as large customers begin taking power.
Both companies have credible growth plans, but NextEra has more ways to participate in the energy buildout. That gives it the higher growth potential, although investors still need to consider how much capital these projects require and how quickly they translate into profits.
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The Risks Behind the Opportunity
Meeting that demand won’t come cheap. Utilities have to spend billions on power plants, transmission lines, and storage facilities, often years before they start seeing returns on that investment. And things can get complicated if interest rates rise, projects run into delays, or regulators don’t approve the returns companies were expecting.
NextEra’s renewable energy business adds another layer of complexity. Project economics depend on securing customers, obtaining permits, managing equipment costs, and bringing facilities online on schedule. Its expansion into gas-fired generation and potential nuclear projects also shows that the company is trying to meet demand with multiple technologies rather than relying on renewables alone.
Duke Energy Corporation faces similar capital-spending pressures. It plans to add 15 GW of generation capacity by 2031 and is investing heavily in infrastructure. The company has also emphasized that large customers must pay their share of the costs required to serve them. That protection matters: otherwise, existing customers could end up bearing more of the expense.
Both companies are spending heavily to meet rising demand, but that spending only makes sense if it translates into higher earnings over time. More demand is good news, though investors still need to see these investments pay off.
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Valuation: Duke Is Marginally Cheaper, but Is It Cheap Enough?
NextEra trades at 17.31x trailing earnings and 17.73x forward earnings. Duke trades at 17.19x and 15.95x, respectively. Neither looks particularly expensive at first glance, but utilities often trade at modest valuations because their growth is relatively predictable. The question is how much growth investors are getting for the price they pay.
NextEra is counting on renewables, battery storage, and data center demand to grow adjusted earnings by at least 8% a year through 2035. That would go a long way toward justifying its valuation. But getting there will take a lot of investment, and higher borrowing costs or delays in bringing projects online could make the target harder to hit.
Duke is aiming for more modest earnings growth of 5% to 7% a year. At 15.95x forward earnings, though, the stock doesn’t have to deliver as much growth to make the valuation work. It may not offer NextEra’s upside, but investors are paying less to own it. NextEra has more ambitious plans, while Duke makes a simpler case for investors who would rather not pay extra for growth that has yet to arrive.
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Conclusion
NextEra has more going for it in terms of growth, with its utility business, renewables, battery storage, and the opportunity to supply power to data centers. Duke doesn’t have quite the same growth potential, but its lower valuation reflects that.
NextEra may have more growth potential from renewables, battery storage, and data center demand. Duke, on the other hand, offers slower growth at a slightly lower price. Both should benefit from rising power demand, but NextEra may offer more upside.
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Market Sentiment
NextEra Energy was held by 80 hedge funds with a combined stake value of about $3.41 billion at the end of Q2 2026, according to the Insider Monkey database. That compares with 74 hedge funds holding around $3.17 billion in the previous quarter.
Duke Energy was held by 51 hedge funds with a combined stake value of about $1.99 billion at the end of Q2 2026. In the previous quarter, 55 hedge funds held around $2.20 billion worth of the stock.
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This article is originally published at Insider Monkey.
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