Why NextEra Energy Stock Jumped Today

Key Points

• NextEra is a leading power infrastructure company in the U.S.

• It appears to be in the right sector at the right time.

• 10 stocks we like better than NextEra Energy ›

The stock of NextEra Energy (NYSE: NEE) is on the move today on two news reports. Shares of the parent company of the largest electric utility as well as the biggest energy infrastructure developer in the U.S. jumped nearly 4% Wednesday morning.

After pulling back slightly, NextEra stock was still trading 2.3% higher as of 1:18 p.m. ET. The company delivered an investor presentation today, but the market might be more focused on a reported takeover bid for competitor AES Corporation.

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Image source: Getty Images.

Renewables will help power artificial intelligence

NextEra gave a presentation for investors today at the Wolfe Research Utilities, Midstream, and Clean Energy Conference, just one day after AES presented at the same forum. NextEra told attendees how it planned to help power America's growing energy needs through various sources, including its wind, solar, and nuclear energy projects. The company also said it will use its leading battery storage capacity.

But today's stock jump more likely came after the Financial Times reported that AES is the target of a takeover bid by BlackRock subsidiary General Infrastructure Partners (GIP). The reported $38 billion bid would give GIP a power-generation and utility company that could help support the increasing need to power data centers being built for artificial intelligence (AI) applications.

As a leader in the sector, NextEra doesn't need a takeover bid to give investors a good return. The company told investors it continues to expect 6% to 8% annual earnings-per-share growth through 2027. With demand continuing to accelerate, investors could expect the company to meet or even beat that guidance. It's a stock in the right sector at the right time.

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Howard Smith has positions in NextEra Energy. The Motley Fool has positions in and recommends NextEra Energy. The Motley Fool recommends BlackRock. The Motley Fool has a disclosure policy.