Few growth stories come with a regulator’s calendar attached. NextEra Energy (NYSE:NEE) has one. The company grew adjusted earnings per share 9.5% in the second quarter of 2026, yet its stock trades well below the multiple investors happily paid for most of the past five years.
The business has two halves. Florida Power & Light/FPL is a regulated utility that sells electricity to homes and businesses across Florida and earns an approved return on what it builds. NextEra Energy Resources develops and runs wind, solar, and battery projects, selling the output under long-term contracts. That clean generation profile positions NextEra among the 10 Best AI Energy Stocks to Buy in 2026 as technology hyperscalers scramble to secure massive power capacity. Now NextEra wants to fold Dominion Energy, the Virginia-based utility, into the mix. Whether the stock’s discount is an opening or a fair price comes down to two things: how quickly data center demand turns into signed contracts, and how long shareholders are willing to wait on regulators.
Florida Keeps Compounding
A utility’s edge is easy to describe and hard to copy: a territory where customers can’t shop elsewhere, and growth arrives on its own. FPL’s territory keeps expanding. The utility added more than 90,000 customers over the past year, and its regulatory capital employed (the asset base regulators let it earn a return on) rose about 9.3%.
That base lifted FPL’s second-quarter net income to $1.412 billion, up from $1.275 billion a year earlier. The renewables arm brings a different kind of advantage: visibility. Its backlog of contracted projects sits at about 35.1 GW after adding 3.6 GW in the quarter, including 2 GW of battery storage. That pipeline places NextEra squarely among utilities riding the AI power boom.
The Data Center Queue
FPL reports about 21 GW of large-load interest, with hyperscalers (the giant cloud providers) among the interested parties, and it’s in advanced talks on 12 GW. Some of that load could begin service as early as 2028, and management expects to announce at least one large-load deal under its tariff by year-end.
Here’s the catch: no contract has been announced yet. Until one is, the queue is a promise rather than proof, and investors weighing NextEra against nuclear power stocks chasing the same demand may notice that difference. Management expects 2026 adjusted EPS of $3.92 to $4.02 and is aiming for the high end. Longer term, it targets adjusted EPS growth of 8% or more a year through 2032, off a 2025 base of $3.71.
Is Dominion Worth the Wait?
The Dominion deal isn’t expected to close until the second half of 2027, and it needs sign-off from regulators in Virginia and the Carolinas, plus federal approvals. Virginia’s review alone runs six months by statute. If the deal closes, Dominion customers would receive $2.25 billion in bill credits funded by shareholders, not ratepayers.
NextEra shareholders approved issuing new stock for the deal with 99.47% of votes cast, and also raised authorized shares from 3.2 billion to 5 billion. That’s a lot of new paper. Income investors face a second adjustment, too: dividend growth of roughly 10% a year through 2026 steps down to 6% a year through 2028.
The combined company targets adjusted EPS growth of 9% or more through 2032, a notch above NextEra’s standalone goal. The risk isn’t that the math is wrong. It’s that approval takes longer, or costs more, than planned.
A Discount With Strings
At a forward P/E of 19.24, as of October 12, investors are paying about $19 for every dollar of expected earnings, compared with a five-year average of 23.41. That’s a real markdown for a company that hasn’t cut its growth targets. The stock does trade above the sector’s 17.48 P/E, but the premium buys growth. Expected EPS growth of 8.79% in 2027 lines up with management’s long-range target, which is the kind of steady, high-single-digit compounding. GAAP EPS of $1.50 ran well above adjusted EPS of $1.15 in the quarter, but guidance is built on adjusted figures, so that’s the yardstick here. The discount seems to reflect the deal’s long timeline and the unsigned data center contracts, which delay the payoff without threatening the core business. Hedge funds seem to like the setup more lately, with 80 funds holding the stock in the most recent quarter, up from 74 in the prior one. Short interest sits at 2.85% of the float, suggesting relatively limited bearish positioning.
Patience Has a Price Tag
The evidence points to a stock that’s cheaper than its own history for reasons that look temporary rather than structural. FPL keeps growing, the backlog keeps filling, and earnings are tracking management’s plan.
That makes the setup most appealing to patient, income-minded investors who can live with a slower dividend and a merger that won’t close until late 2027. A large-load contract by year-end would help close the gap. Tough conditions from Virginia regulators, or a quiet year-end with no data center deal, would make the discount look deserved.
While we acknowledge the risk and potential of NEE as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NEE and that has 10,000% upside potential, check out our report about this cheapest AI stock.
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