The article compares two energy stocks positioned to benefit from AI data center demand: Bloom Energy, which manufactures solid oxide fuel cell systems for on-site power generation with 85% projected revenue growth but high valuation multiples and profitability challenges; and Constellation Energy, the largest U.S. nuclear power operator with more modest but stable growth, strong cash flow, and lower valuation metrics. The author recommends Constellation Energy for long-term investors due to its reasonable valuation and reliable earnings, while cautioning that Bloom's history as a volatile stock warrants caution despite its growth potential.

NextEra Energy (NEE) has underperformed its industry over the past three months amid investor concerns about capital expenditure plans and potential share dilution. However, the company benefits from strong growth drivers including $94.1B in planned investments through 2030, expanding renewable capacity, and increasing electricity demand from data centers and AI. With a 12.28% ROE, consistent earnings beats, and a 3.16% dividend yield, NEE remains well-positioned for long-term growth. However, its 18.29X forward P/E valuation premium suggests new investors should wait for a more favorable entry point.

With average U.S. electricity bills rising to $147 per month since 2021, an unconventional strategy involves investing in dividend-paying utility stocks to generate income that covers power costs. Investors would need approximately $60,000 invested in utility stocks yielding around 3.1% to generate the $1,764 needed annually to cover average electricity bills.

AI data centers face a significant electricity shortage, with the U.S. alone projected to have a 32-gigawatt shortfall by 2028. The article identifies seven stocks positioned to benefit from this power crisis: utility companies with nuclear capabilities (Constellation Energy, NextEra Energy, Vistra), equipment manufacturers for power generation and management (GE Vernova, Bloom Energy, Eaton, Vertiv). These companies are capitalizing on growing demand for alternative power solutions and energy-efficient infrastructure.

NextEra Energy (NEE), a utility company and parent of Florida Power & Light, has demonstrated a consistent track record of beating earnings estimates with an average surprise of 8.36% over the past two quarters. The company's positive Earnings ESP of +1.70% combined with its Zacks Rank #3 suggests another potential earnings beat ahead of its October 21, 2026 report.

Constellation Energy Corporation (CEG) is significantly expanding its renewable energy portfolio with hydroelectric, solar, wind, geothermal, and battery storage assets following its Calpine acquisition. The company achieved a 96% renewable energy capture rate in Q2 2026 and signed a 15-year renewable energy agreement with Toyota Motor North America. CEG's earnings are projected to grow 29.82% in 2026 and 8.76% in 2027, with a trailing ROE of 14.89% exceeding industry averages.

NextEra Energy (NEE) is positioned as a likely earnings beat candidate for Q3 2026 with an Earnings ESP of +1.70% and Zacks Rank #3. The company is expected to report EPS of $1.18 (up 4.4% YoY) and revenues of $9.05 billion (up 13.7% YoY) on October 21. With a history of beating consensus estimates in the last four quarters, the combination of positive ESP and Hold rating suggests strong odds of outperforming expectations.

The article explains how investors can use the Zacks Earnings ESP (Expected Surprise Prediction) tool to identify stocks likely to beat earnings expectations. It highlights that combining positive ESP with a Zacks Rank #3 or better has historically resulted in positive earnings surprises 70% of the time with 28.3% average annual returns. Two utilities stocks are featured as examples: NextEra Energy and Xcel Energy, both with positive ESP figures ahead of their October earnings releases.

NextEra Energy has increased its dividend for 31 consecutive years and plans ~10% annual growth through 2026, followed by ~6% increases in 2027-2028. The key metric to evaluate is the dividend payout ratio, which stands at 62-64% against 2026 earnings guidance—a manageable level for a regulated utility. With strong earnings growth targets of at least 8% annually through 2035 and rising electricity demand, NextEra's dividend appears sustainable for another decade.

TotalEnergies and KKR have agreed to add 700 MW of solar capacity to their 50:50 joint venture, expanding total capacity from 1.4 GW to 2.1 GW. The $1.2 billion portfolio includes three utility-scale solar projects in Texas and Ohio expected to begin operations by Q1 2027, supporting TotalEnergies' goal of achieving over 100 TWh of net electricity production by 2030.

Duke Energy restored approximately 10,000 customers in North Florida following Hurricane Isaias, demonstrating the value of grid modernization investments. The company plans to deploy $103 billion during 2026-2030 to expand generation capacity and grid infrastructure, with forecasted 6.5% annual EPS growth. However, DUK trades at a premium valuation compared to industry peers and carries a Hold rating.

The iShares U.S. Infrastructure ETF (IFRA) is a passively managed fund with $4.02 billion in assets, offering broad exposure to the Utilities-Infrastructure sector with a low 0.3% expense ratio and 1.78% dividend yield. The fund has returned 9.88% year-to-date and 11.46% over the past year, with top holdings including Union Pacific, NextEra Energy, and Caterpillar. Alternative infrastructure ETFs like GRID and PAVE are also available for investor consideration.