Forget Tech Stocks: The Utility Play That Could Outperform Nvidia

Nvidia (NASDAQ: NVDA) and other artificial intelligence (AI) companies dominated headlines with their meteoric stock performances over the past few years, but the behind-the-scenes businesses powering AI leaders are poised for serious gains now as well. Energy companies will play a vital role as AI electricity demand continues to compound. One of the most critical companies in providing the required power is NextEra Energy (NYSE: NEE).

Sunny days ahead for NextEra

The Florida-based utility company is uniquely positioned to succeed as AI infrastructure projects expand, while also offering the stability of a traditional electric company. Consistent dividends lower NextEra's risk profile, while its renewables arm powers its exciting future growth. This dual-business model could make NextEra the real winner of the AI age.

Image source: Getty Images.

It won't be easy to outpace Nvidia's stock. In just the past 12 months, Nvidia is up more than 50%, but NextEra's double-dipping in regulated utilities and renewables gives it multiple growth engines.

One important strategic partnership that could accelerate future growth is with Alphabet's (NASDAQ: GOOGL) (NASDAQ: GOOG) Google Cloud. This collaboration will help NextEra's go-to-market strategy in AI solutions and also aims to modernize the energy sector, according to the company's latest earnings presentation.

NextEra's regulated utility subsidiary, Florida Power & Light Company (FPL), also continues to grow steadily. As part of NextEra's full-year 2025 report released on Jan. 27, FPL brought in an impressive amount of more than $5 billion in 2025, a notable increase from the $4.54 billion in 2024 revenue.

Overall, NextEra's earnings per share grew 8.2% year over year in 2025. The company expects much of the same in the coming years as well.

On the value side, NextEra pays a dividend that has increased consistently for years. The current dividend stands at $2.26 per share annually and is expected to increase by 10%. NextEra Energy's financials are solid, and it's the utility side of the business that lays the foundation for the renewables segment to really take on risk that could have significant payoffs over the next several years.

NextEra's stock is fairly priced. It's currently trading at a forward P/E ratio of around 20. While the company's PEG ratio is slightly higher at about 2.62 as of Feb. 2, I don't think the slight premium should deter investors from NextEra's longer-term growth potential.

The grid could use an update

There's a lot of opportunity for NextEra to capitalize on. The building of data centers, AI infrastructure, and other industrial electrification projects are still in the early stages. Power grids and storage need to be updated and modernized. This is all necessary work that will require immense capital, but will ultimately allow NextEra to profit in the long term.

It's quite simple: AI powerhouses, such as Nvidia, cannot succeed without sufficient electricity. In a way, this is a lightning-in-a-bottle moment for utility investors who normally don't expect hypergrowth.

If NextEra can keep up with demand, I anticipate investors being rewarded with higher dividends and even higher stock appreciation that outpaces last year's performance and perhaps even outdoes Nvidia itself.

Catie Hogan has positions in NextEra Energy. The Motley Fool has positions in and recommends Alphabet, NextEra Energy, and Nvidia. The Motley Fool has a disclosure policy.