Power company Dominion Energy (D) is set to splash the cash to take advantage of surging demand for data centers across the U.S.
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Power Demand Set to Beat Records
The utility is charging up its five-year capital expenditure plan and now expects to spend $50.1 billion between 2025 and 2029. That’s up from previous estimates of $43.2 billion. It is making the change to keep pace with the huge rise in power demand from data centers dedicated to artificial intelligence and cryptocurrency from large and increasingly smaller companies in the U.S. Indeed, this, alongside homes and businesses seeking heat and transportation, is set to see power demand rise to record highs in both 2025 and 2026, according to the U.S. Energy Information Administration.
Data Surge Fails to Energize Earnings
Dominion, reporting its Q4 and full year 2024 results, said data centers contracted 88% more power capacity, or 19 gigawatts (GW), in December as compared to July. Despite this current and expected future surge in demand, Dominion reduced its 2025 operating earnings forecast to between $3.28 and $3.52 per share, compared with a range of $3.25 to $3.54 per share earlier. For the fourth quarter, it posted operating earnings of 58 cents per share, beating analysts’ estimates by 2 cents. This was despite worse-than-normal weather and a $276 million charge for costs related to its offshore wind energy project off the coast of Virginia.
Is D a Good Stock to Buy?
On TipRanks, D has a Hold consensus based on 2 Buy and 9 Hold ratings. Its highest price target is $66. D stock’s consensus price target is $59.18 implying an 6.34% upside.
