NextEra Energy stock price jumped to a record high on Monday, continuing a bull run that started in 2023 when it bottomed at $44.15. It moved to a high of $87.10, giving it a market capitalization of over $170 billion. This surge may continue after it formed an inverse head-and-shoulders pattern on the weekly chart.
NextEra stock jumps after power deal with Google
NextEra Energy is one of the biggest energy companies in the United States, supplying power to millions of households. It focuses mostly on clean energy solutions like solar, wind, and nuclear.
NextEra Energy stock went parabolic after the company inked a large deal with Google. This deal mirrors another one that Microsoft did with Constellation Energy.
The company will work on its nuclear power plant in Iowa and start providing it to Google for its data center use. This nuclear plant will start operating in the next few years and provide power to Google in the next 25 years. Ruth Porat, Google’s CEO said:
“This partnership serves as a model for the investments needed across the country to build energy capacity and deliver reliable, clean power, while protecting affordability and creating jobs that will drive the AI-driven economy.”
AI tailwinds are benefiting NEE and other power companies
NextEra and other power companies in the United States are benefiting from he ongoing AI tailwinds. That’s because power consumption, which was stagnant a few years ago, has now gone parabolic in the past few year.
Data shows that AI-related data centers are expected to consume between 7% and 12% of all the power generated in the US by 2028, up from 2% today.
This growth has made some companies in the industry to do well in the past few years. This includes companies like Oklo and NuScale that are developing small modular reactor solutions.
A look at the best-performing companies in the S&P 500 this year shows that some energy firms like NRG Energy, GE Vernova, Constellation Energy, Monolithic Power Systems, and Vistra are ome of the best gainers.
This growth has translated to NextEra Energy’s earnings. The most recent results showed that its net income rose from $1.23 billion in the second quarter of 2024 to $1.275 billion. Its earnings per share rose to 62 cents from the previous 60 cents.
The company has continued to produce more power, adding 3.2 GW of new renewable and storage to it backlog. This included 1.77 GW of solar, 0.9 GW of battery storage, and 0.3 GW of wind.
The new power purchase agreement with Google will not have an impact on its revenue in the near term. Management expects that its annual EPS will be $3.70 this year and $4 and $4.32 in the next two years.
NextEra stock price technical analysis
NEE stock chart | Source: TradingView
The weekly chart shows that the NextEra stock price has rebounded has rebounded from a low of $44 in 2023 to $86 today.
It has remained above the 50-week and 100-week Exponential Moving Averages (EMA). Most importantly, it has formed the textbook inverse head-and-shoulders pattern, which is a common bullish reversal sign.
The distance between the shoulder and the neckline is 46%. Measuring the same distance from the neckline gives a long-term target of $121.
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