RJ Hamster
AI Forced Two Utilities to Merge… Here’s How to…
Eric Fry
Editor, Smart Money
DAILY ISSUE
AI Forced Two Utilities to Merge… Here’s How to Profit
Hello, Reader.
Casey, Illinois, is home to the world’s largest rocking chair, standing in at 56 ft. and 1 in. tall.
The United Kingdom houses the world’s largest cardboard structure, 55 ft. long and 25 ft. tall, depicting a Trojan horse.
And Italy made the world’s largest pizza, measuring 13,957.77 square feet. Mangia!
A new record was created this week. This time, on Wall Street.
On Monday, NextEra Energy Inc. (NEE) – the largest renewable energy developer in the U.S. – announced that it will acquire Dominion Energy Inc. (DE) – which helps power the world’s largest concentration of AI data centers – for almost $67 billion.
And create the world’s largest regulated electricity utility in the process.
Hear that, Guinness World Records?
This proposed merger shows that Wall Street increasingly views electricity as one of the most important foundations of the AI boom. Investors are starting to see power companies not just as utilities, but as critical infrastructure needed to support the next generation of technology.
In today’s Smart Money, I’ll explain the details of this merger, and what it represents:
AI is turning electricity into a high-growth industry. And that is pushing electricity companies to scale like tech infrastructure firms.
That means energy investing can grow alongside energy expansion. So, I’ll share how to find the best plays to make.
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The Merger That Proves AI’s Energy Crisis Is Real
To start, the NextEra-Dominion merger is aimed at meeting the massive electricity demands of AI infrastructure.
AI requires staggering amounts of electricity, with the International Energy Agency finding that the global energy consumption for data centers is projected to reach around 945 Terawatt-hours (TWh) by 2030. That’s more than double the 415 TWh that data centers consumed globally in 2024.
Those figures help explain this week’s landmark merger.
The all-stock deal would have NextEra exchange 0.8138 of its stock for each outstanding Dominion share, valuing Dominion at $75.97 per share.
NextEra currently has a market cap of more than $190 billion to Dominion’s $50 billion. The combined utility giant will have a market cap of $249 billion, with an enterprise value of $420 billion.
Here’s what the merger means for future energy production: Dominion is the primary electric utility that powers Virginia’s “Data Center Alley,” the largest concentration of data centers in the world. So, the company already resides in a key hotspot. NextEra brings scale, capital, and renewable energy development strength.
Together, they aim to become a dominant “power backbone” for AI infrastructure.
The combined company would serve roughly 10 million customers, and massively expand generation capacity.
Dominion’s stock rose over 14%, while NE fell more than 4% after the announcement. This type of reaction is common in mergers: The target company rises sharply, while the acquiring company temporarily declines as investors digest the costs and risks of the deal.
Simply put, investors viewed the deal as far more beneficial for Dominion shareholders than for NextEra’s.
Despite the initial drop, the market may still like the long-term story because it creates a utility giant well-positioned to benefit from growing AI-driven electricity demand.
The merger adds to NextEra’s current initiatives to keep pace with AI electricity demands:
- Last year, it partnered with Alphabet to reopen the Duane Arnold nuclear power plant in Iowa by 2029.
- In March, the renewable energy company received approval from the current administration to develop up to 10 gigawatts (GW) of natural gas power generation in Texas and Pennsylvania.
The funding for those projects includes the $7 billion investment by Alphabet in Iowa in May 2025 and Japan’s $550 billion investment commitment from last year’s Japan-U.S. trade deal, which will help NextEra’s initiatives in natural gas power generation.
It’s safe to say that a significant amount of money is already at stake. That capital will continue to grow as NextEra will also acquire Dominion’s nearly 51 GW of contracted data center capacity – which serves customers such as Alphabet, Amazon.com Inc. (AMZN), CoreWeave Inc. (CRWV), CyrusOne, Equinix Inc. (EQIX), Meta, and Microsoft Corp. (MSFT).
In all, this merger signals that electricity is becoming one of the biggest opportunities in the AI economy. It’s a bet that AI growth will turn power companies into core infrastructure plays for the AI era.
Energy companies will increasingly take center stage in the AI production. So, I want to show you how to safeguard and enhance your portfolio as its growth unfolds…
Don’t Just Watch History – Position For It
Navigating the AI energy landscape is complicated.
For major energy companies, it requires strategic, expensive mergers.
For us investors, it involves a strategic, “all of the above” investing approach.
That’s because all energy sources are necessary to sustain AI. We’re talking nuclear power, renewable energy sources, and the abundant opportunities presented by natural gas.
To help you choose the smartest investments, I’ve put together a report called Sell This, Buy That: Energy’s Swan Song, where I reveal three of my favorite legacy energy plays –plus one coal miner to sell immediately.
You can learn how to access this report in my Sell This, Buy That presentation.
In the special video, I also explain why investors should be cautious about relying on household names that have already peaked and instead focus on undervalued, high-growth AI companies… and give away seven carefully selected “Buys” and “Sells,” completely free.
Click here for all the details.
Regards,
Eric Fry
Editor, Smart Money
