NextEra has traditionally been known as a regulated utility with a renewables development arm, yet is pivoting to become one of the few companies in the United States that can build power infrastructure at large scale across renewables, storage, gas, transmission and potentially nuclear. As you’re well aware, data center demand is insatiable, and NextEra’s ability to work across two growth engines is poised to benefit: Florida Power and Light provides the large, regulated utility platform while the Energy Resources solutions (NEER) provide renewables and storage. This can help break NextEra out of the bucket of being a passive beneficiary of load growth and into a builder that is enabling critical data center growth. In other words, NEE is pivoting toward being one of a handful of credible, large-scale solutions for the power demands of AI.

How NEE Differs from other Utility Players

NextEra owns Florida Power and Light (FPL) which services 12 million people in Florida and the company also owns NextEra Energy Resources (NEER). According to the company, they are the largest electric power and infrastructure company in North America.

What’s key about NEE is the company is highly diversified, and is a Swiss army knife, of sorts, by running a large-scale utility combined with solar, battery storage, gas and nuclear projects. Last December, NEE stated they have 76 GW of operating power although this has grown since that announcement.

Goal: 30 Gigawatts by 2035

NextEra has provided a framework for 15 gigawatts by 2035, although this too long of a time frame for most growth investors.

Here is what was stated on the call:

“As we discussed in December, our data center hub strategy is all part of our new "15 by 35" origination channel and goal for Energy Resources to place in service 15 gigawatts of new generation for data center hubs by 2035. This dedicated work stream to power data center hubs is expected to help us achieve our existing development expectations through a mix of new renewables, battery storage and gas generation. And it gives us one potential path to achieve the 6 gigawatts, the midpoint of our development expectations of new gas-fired generation build through 2032. We currently have 20 potential hubs we are discussing with the market and we expect that number to rise to 40 by year-end. While we won't convert every single hub, I'll be disappointed if we don't double our goal and deliver at least 30 gigawatts through this channel by 2035.”

As you can see, the actual goal is 30GW over the next 10 years, yet in the near-term, the push toward BYOG is where NextEra could see significant progress.

What we are looking for is more deals signed in 2026, construction on AI data center deals to commence in 2027 with meaningful key metrics supporting a ramp in 2028 and beyond. Below is how we get there.

Bring-Your-Own-Generation (BYOG): Solar + Battery Storage

“Bring your own generation,” or BYOG, means a large power user such as a hyperscaler does not rely solely on the local grid to supply incremental electricity demand. Instead, the customer helps fund or contract for dedicated generation capacity built specifically to support its load, whether that is gas-fired generation, solar paired with storage, standalone batteries, or another power source.

Due to the electrical grid being quite stressed, which we aptly covered here, hyperscalers will seek to supply their own behind-the-meter generation and generators are a key part of a behind-the-meter setup. While this will not include the FP&L capacity for NEE, it does encompass the Energy Resources solutions (NEER) side of the company, representing about 1/3rd of the company’s revenue yet is quickly growing to about half of the backlog:

“Energy Resources had another record year, originating new long-term contracted generation and storage projects. We added approximately 13.5 gigawatts to our backlog, which includes a record quarter of origination of 3.6 gigawatts since our last call. Our backlog now stands at approximately 30 gigawatts after taking into account roughly 3.6 gigawatts of new projects placed into service since our third quarter call.”

However, when we strip down management commentary even further, they hint that a combination of solar and battery storage is where they expect to see the most progress in the near-term through 2029, stating of the “3.6 gigawatts since our last call. 1.7 gigawatts, or almost 50% of our fourth quarter additions, were solar projects.” Management also called out battery storage growth of 220% YoY from 2024 to 2025 for a total of 2GW. Although these are green shoots, any solution that solves for time-to-power should be watched closely especially given management emphasized they have secured all solar and battery storage capacity through 2029:

“We continue to be well positioned to build more renewables, which remain the lowest cost and fastest solution to meet our customers' immediate needs. We've secured solar panels to meet our development expectations through 2029. We've begun construction on those projects, too. We've also secured 1.5x our project inventory against our forecast, providing us permitting protection. Few companies in our industry are positioned like us.

We've taken the same approach for battery storage, securing a domestic battery supply through 2029. That's important because battery storage now represents almost 1/3 of our 30 gigawatt backlog with nearly 5 gigawatts originated over the past 12 months. We don't see this demand slowing. Nearly every region in the country needs capacity, and battery storage is the only new capacity resource available at scale.”

The reason this matters is that NEE could easily be passed off as a slow-moving utility company, perhaps subject to capped grid pricing. Yet, beneath the surface, NEE is slowly pivoting to become a strong contender on the 2027-2029 front across solar plus storage, and then natural gas.

If you look closely at what is cited above, solar and storage are participating at a higher rate for the backlog than in previous years with 50% of the fourth quarter additions being solar and also 1/3 of backlog coming from battery storage. The 5 GW originated in the last 12 months goes beyond Bloom Energy, for example, typically in the 2-3 GW size annually (this could rapidly increase for both companies and is more of a measuring stick to help acquaint the size of the storage backlog).

More on Storage:

Management discussed storage alongside solar in the earnings call, yet we could see disproportionate growth in storage related to elevated grid pricing, as well. Storage can offer an arbitrage to accumulate when pricing is low, such as during off hours, and then discharge when pricing is elevated. In this case, storage solutions receive capacity payments for the storage to be available even if it doesn’t get dispatched.

Lastly, although a bit early, storage could be strategically important for AI inference workloads over the next 1-2 years as they are more variable in seeing peak usage compared to training.

Natural Gas Ramping with Symmetry Acquisition

While renewables and storage offers the most immediate upside, deals around natural gas will also be ramping in the background. According to management, natural gas accounts for 20 GWs with 6 GW targeted for commercial operation by 2032 in the “15 by 35” goal mentioned above. To assist, NEE has secured gas turbine slots with GE Vernova for GW of 4GW of supply, stating they are not concerned about gas turbine availability or pricing given the strong relationship there.

To compliment NEE’s strength in building gas plants, the company acquired Symmetry in January, a company that offers natural gas supply and more of a vertical integration for NEE across natural gas customers in 34 states.

Last month, the White House approved NextEra as a key developer for up to 10 GW of natural gas-powered generation as part of the U.S.-Japan trade deal and will specifically be developed in the Texas and Pennsylvania regions.

Note on FPL Capacity

Although as a growth investor, my preference is new trajectories and catalysts, it’s the combination of what NEE offers that is attractive. The FPL business offers 37 GWs of generation, which results in rate-based earnings growth. Although grid pricing may be capped, FPL offers a “large-load” tariff that helps increase speed-to-market while hyperscalers bear the cost of the additional build-out.

Here is what was stated on the call:

“FPL's agreement also includes a large load tariff. We believe the tariff strikes the right balance by providing hyperscalers with speed to market at a competitive price while, just as importantly, protecting our existing customers from bearing infrastructure build-out costs needed to support hyperscalers. FPL's speed-to-market advantages, combined with its best-in-class service is creating significant large load interest to the tune of over 20 gigawatts to date. Of that, we are in advanced discussions on about 9 gigawatts, a portion of which we now believe we could begin serving as soon as 2028. For context, every gigawatt is equivalent to roughly $2 billion of CapEx and earns the same return on equity as other FPL investments.”

Financials

Q4 Revenue Grew by 21%

NextEra Energy’s (NEE) Q4 2025 revenue grew by 20.7% YoY and down (18.4%) QoQ to $6.5 billion. Revenue growth accelerated by 15.4 percentage points from 5.3% YoY growth in the previous quarter. The company is a beneficiary of AI data center energy demand. The Q4 sequential decline was seasonal as the company’s Q4 2024 revenue was down (21.7%) YoY and (28.8%) QoQ.

Analysts expect Q1 2026 revenue to grow by 15.5% YoY and 10.9% QoQ to $7.21 billion. Revenue growth is expected to slightly accelerate to 17.8% YoY in Q2, then moderate to 12.8% and 8.4% in the subsequent two quarters.

Full year 2025 revenue grew by 10.7% YoY to $27.4 billion. Analysts expect 2026 revenue to grow by 15.8% YoY to $31.7 billion and 8.1% YoY to $34.3 billion in 2027. The company’s President and CEO, John Ketchum, was optimistic on the opportunities in 2026 and said in the earnings call, “As we enter a new year, we're focused on the opportunity in front of us. America needs more electrons on the grid and America needs a proven energy infrastructure builder to get the job done. That's who we are and that's what we do.”

FPL Q4 Revenue grew by 11%

Florida Power & Light Company (FPL) Q4 revenue grew by 11% YoY and down (19%) QoQ to $4.27 billion. The company’s earnings release highlighted the new four-year rate agreement. “Last November, the Florida Public Service Commission approved a four-year rate agreement that allows FPL to continue making smart, necessary infrastructure investments on behalf of its customers, while keeping customer bills well below the national average. FPL expects to invest between $90 billion and $100 billion through 2032 to support Florida’s continued growth, while typical residential customer bills are expected to increase only about 2% annually between 2025 and 2029, which is lower than the current inflation rate of about 3%. Today, FPL's typical residential bill is more than 30% lower than the national average. The new rates took effect Jan. 1, 2026.”

Management also highlighted a strong pipeline, primarily driven by speed-to-market and exceptional service. “FPL's speed-to-market advantages, combined with its best-in-class service is creating significant large load interest to the tune of over 20 gigawatts to date. Of that, we are in advanced discussions on about 9 gigawatts, a portion of which we now believe we could begin serving as soon as 2028.”

Energy Resources Q4 Revenue grew by 46%

NextEra Energy Resources (NEER) Q4 revenue grew by 46% YoY and down (17%) QoQ to $2.12 billion. The Energy Resources had another record year, originating new long-term contracted generation and storage projects. The company added approximately 13.5 gigawatts to the backlog in 2025, including a record quarter of origination of 3.6 gigawatts since the company’s Q3 earnings call.

The company’s backlog at the end of Q4 is approximately 30 gigawatts after taking into account roughly 3.6 gigawatts of new projects placed into service since the company’s Q3 earnings call. Battery storage is the fastest-growing part of the backlog, representing almost one-third of the backlog.

Management also highlighted during the earnings call that they continue to advance the recommissioning of the Duane Arnold nuclear plant in Iowa, made possible by the 25-year power purchase agreement with Google, which the company announced last year and is expected to be fully operational by the first quarter of 2029.

During the Investor Day in December, management said they expect to develop data center hubs totaling 15 GW to 30 GW by 2035, and they reiterated this guidance during the Q4 earnings call. They have already identified 20 potential hubs and expect to identify 40 by the end of 2026.

Margins

The company’s Q4 operating margin improved YoY, primarily driven by operating leverage.

Q4 operating income was $1.59 billion or 24.4% of revenue compared to $941 million or 17.5% of revenue in the same period last year.
Q4 net income was $1.54 billion or 23.6% of revenue compared to $1.2 billion or 22.3% of revenue in Q4 2024.
Q4 adjusted net income was $1.13 billion or 17.4% of revenue compared to $1.1 billion or 20.3% of revenue in the same period last year.

Adjusted EPS

The company’s Q4 adjusted EPS grew by 1.9% YoY to $0.54. Analysts expect Q1 adjusted EPS to be down (2.3%) YoY to $0.97 and expect adjusted EPS growth to accelerate to 5.6% and 12.4% in the subsequent two quarters.

Looking ahead, analysts expect adjusted EPS to grow by 8.2% YoY to $4.01 in 2026 and 9% YoY to $4.37 in 2027. During the Q4 earnings, management reiterated its guidance set at Investor Day in December to grow adjusted EPS at a CAGR of 8% from 2025 to 2032 and at the same rate from 2032 to 2035.

Cash Flow and Balance Sheet

The company has steady operating cash flows. However, due to high capex, there is a wide difference between operating cash flow margin and free cash flow margin.

Q4 operating cash flow was $2.5 billion or 38.4% of revenue compared to $1.98 billion or 36.8% of revenue in the same period last year.
Q4 free cash flow was $519 million or 8% of revenue compared to $204 million or 3.8% of revenue in Q4 2024.
The company had a high debt of $95.6 billion compared to cash of $2.8 billion at the end of Q4 2025. The company recently priced a $2.3 billion offering of equity units on March 3. The hybrid security will consist of a contract to purchase the common stock in about three years and undivided beneficial ownership interests in two series of debentures issued by NextEra Energy Capital Holdings. It provides the company with immediate liquidity while deferring common equity dilution for approximately three years.

Conclusion:

The market may be valuing NextEra for its long duration assets in the 2030+ time frame, whereas anything announced interim could offer incremental alpha. There’s been a decent rally in this stock, and it’s certainly not without political pressures being in the renewables industry and grid-pricing controversy. However, where there is a will, there is a way – and the United States will have to actively remove roadblocks from companies like NEE if we are to contend globally on AI.

As pointed out in my previous analyses, the I/O Fund is actively looking for large-scale utility and infrastructure platforms that can help address what is becoming one of the most important constraints in the United States economy: power availability. Next Era is well positioned there. The more important question for investors is timing, because the companies that can execute sooner rather than later are the ones most likely to generate outsized stock returns.

Royston Roche, Equity Analyst at I/O Fund contributed to this analysis.

Every Thursday at 4:30 pm Eastern, the I/O Fund team holds a webinar for premium members to discuss how to navigate the broad market, as well as various stock and crypto entries and exits. Beth Kindig offers weekly deep dives including lesser-known cryptocurrencies and AI stocks, plus the team offers trade alerts. The I/O Fund team is one of the only audited portfolios available to individual investors. If you’d like to subscribe to the Advanced Market Signals plan, email us at premium@io-fund.com. broad market, as well as various stock and crypto entries and exits. Beth Kindig offers weekly deep dives including lesser-known cryptocurrencies and AI stocks, plus the team offers trade alerts. The I/O Fund team is one of the only audited portfolios available to individual investors. If you’d like to subscribe to the Advanced Market Signals plan, email us at premium@io-fund.compremium@io-fund.com.

Please note: The I/O Fund conducts research and draws conclusions for the Fund’s positions. We then share that information with our readers. This is not a guarantee of a stock’s performance. Please consult your personal financial advisor before buying any stock in the companies mentioned in this analysis.

Recommended Reading:

NextEra: Pivoting Beyond a Regulated Utility Player