Southern (SO) is back in focus after reporting Q1 2026 earnings growth tied to heavier electricity demand from data centers and other large customers, along with a higher quarterly dividend that extends its 78 year payment record.

At a share price of $92.60, Southern has seen a 7 day share price return of 4.01%, while the 90 day share price return is down 3.81%. This comes against a backdrop of fresh earnings, a new shelf registration filing, and ongoing data center related demand and capital plans. Overall, short term momentum looks mixed, while the 5 year total shareholder return of 74.60% points to a stronger long term record.

If the data center and power grid story has your attention, it can be useful to see what else is out there in related infrastructure, starting with 34 power grid technology and infrastructure stocks

With the stock at $92.60 and mixed recent returns, the key question is simple: is Southern still trading below what its data center and grid story could justify, or is the market already pricing in future growth?

Most Popular Narrative: 8.6% Undervalued

With Southern last closing at $92.60 against a narrative fair value of $101.34, the current price sits below what this widely followed framework implies.

The expansion of large-scale electrification projects including hyperscaler data centers and industrial developments across Alabama, Georgia, and Mississippi is materially increasing Southern's load outlook, resulting in regulatory approvals and filings for up to 10 GW of new generation and $13 billion of incremental capital investment, driving long-term earnings and rate base growth.

Want to see what is baked into that story? The narrative leans on steady revenue gains, higher margins, and a future earnings multiple that is on the richer side for a utility.

Result: Fair Value of $101.34 (UNDERVALUED)

However, that story can break if Southern struggles to secure or maintain regulatory support for its larger capital plan, or if construction and equipment costs climb enough to pressure margins.

Another Angle on Valuation

That 8.6% undervalued narrative leans on analyst assumptions, but the current P/E of 23.9x tells a tougher story. It sits above both the US Electric Utilities industry average of 21.6x and peer average of 21.1x, even though the fair ratio is 25.4x. Is the market already demanding a premium for this grid and data center growth story?

To put those valuation gaps into context, it helps to see how the current pricing compares visually against sector peers and that fair ratio benchmark, then decide whether the premium feels justified for you as an investor. See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

Seeing both optimism around growth and concerns around risk in this story, it makes sense to review the numbers yourself and decide quickly where you stand using 1 key reward and 3 important warning signs.

Looking for more investment ideas?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.