NextEra Energy (NEE) has drawn fresh attention after outlining plans to add 15 to 30 gigawatts of new power generation capacity by 2035, largely gas fueled, to target rising U.S. data center electricity demand.

The share price is currently US$92.53. Recent data shows a 15.24% 90 day share price return and a 14.33% year to date share price return. The 1 year total shareholder return of 34.77% points to momentum that has been building alongside news on new capacity plans, dividend intentions and leadership changes.

If you are interested in how growing electricity demand could affect related names, it is a reasonable moment to scan for 26 power grid technology and infrastructure stocks

With NextEra Energy trading close to recent analyst targets and recent returns already strong, the key question is whether current plans for data center power and dividends are fully reflected in the price or whether markets are underestimating future growth.

Most Popular Narrative: 1% Undervalued

The widely followed narrative pegs NextEra Energy's fair value at $93.65, just above the last close at $92.53, framing the current rally as finely balanced.

Accelerating and sustained demand growth for electricity, driven by AI, data center expansion, and electrification of sectors like transportation and heating, positions NextEra to grow volumes and capture higher average revenue per MWh as utilities compete to provide essential infrastructure for hyperscalers and traditional customers. This is expected to support robust revenue growth.

Want to see what sits behind that fair value call? The narrative leans on steady revenue expansion, resilient margins, and a future earnings multiple that assumes investors keep paying up for growth and scale. The tension is how those assumptions stack against regulated returns and big capital needs.

Result: Fair Value of $93.65 (UNDERVALUED)

However, execution setbacks on new gas and data center projects, or tighter rules around tax credits and permitting, could quickly challenge the current fair value narrative.

Another View: Multiples Paint A Richer Price

The fair value narrative suggests NextEra Energy is about 1% undervalued at $93.65 versus $92.53. Yet on earnings multiples, the picture is less generous. The current P/E of 28.2x sits above the US Electric Utilities average of 21.7x and is only slightly below the peer average of 28.7x. The fair ratio points to 31.2x as a level the market could move toward. For you, that mix of premium pricing and limited headroom raises a simple question: is the current story offering enough compensation for valuation risk, or is most of the optimism already in the price?

Next Steps

With sentiment clearly mixed, it makes sense to look past the headlines, move quickly and weigh the trade off between opportunity and risk for yourself with 1 key reward and 2 important warning signs

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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.