AI Is Reshuffling Utilities Stocks. Entergy, NiSource, and Others Could Be Winners.
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Dec 26 2024
0mins
Should l Buy ETR?
Source: Barron's
Utility Stocks Performance: Utility stocks have surged by 20% in 2024, driven by the demand for electricity from AI data centers, with companies like Entergy and NiSource positioned to benefit significantly from this trend.
Investment Opportunities: Analysts are optimistic about utilities' potential for growth alongside their traditional role as safe investments, highlighting firms that can secure deals with tech giants as key players in the evolving market landscape.
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Analyst Views on ETR
Wall Street analysts forecast ETR stock price to fall
15 Analyst Rating
11 Buy
4 Hold
0 Sell
Moderate Buy
Current: 104.650
Low
86.00
Averages
103.87
High
115.00
Current: 104.650
Low
86.00
Averages
103.87
High
115.00
About ETR
Entergy Corporation is an integrated energy company engaged primarily in electric power production and retail distribution operations. The Company operates primarily through a single segment, Utility. The Utility segment includes the generation, transmission, distribution, and sale of electric power in portions of Arkansas, Mississippi, Texas, and Louisiana, including the City of New Orleans. The Utility segment includes five retail electric utility subsidiaries: Entergy Arkansas, LLC, Entergy Louisiana, LLC, Entergy Mississippi, LLC, Entergy New Orleans, LLC, and Entergy Texas, Inc. These companies generate, transmit, distribute, and sell electric power to retail and wholesale customers in Arkansas, Louisiana, Mississippi, and Texas. The Company owns and operates power plants with approximately 25,000 MW of electric generating capacity. It delivers electricity to approximately three million utility customers in Arkansas, Louisiana, Mississippi, and Texas.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Community Protests: Despite attempts by the NAACP and other civil rights organizations to delay the meeting to avoid conflicts with primary elections, the MDEQ proceeded with the vote on election day, leading to community dissatisfaction over the decision-making process and perceived neglect of local voices and environmental impacts.
- Legal Challenges Ahead: The NAACP and Southern Environmental Law Center plan to sue xAI for operating natural gas turbines without federal permits, alleging that the company understated emissions in its application, which could pose health risks to the community.
- Rising Energy Demands: As xAI plans to construct a new data center in Southaven, the anticipated increase in energy demand raises concerns about local environmental quality and residents' quality of life, particularly regarding noise and air pollution issues.
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- Community Opposition: The NAACP has submitted a letter to the environmental agency requesting the meeting be postponed and moved closer to the facility to allow affected residents to participate, highlighting the community's strong discontent with xAI's plans and concerns over air quality and health issues.
- Post-Merger Investment Plans: Following its merger with SpaceX, xAI's valuation reached $1.25 trillion, with plans to invest in a power plant and large data center in Southaven, demonstrating the company's ambition in the rapidly growing generative AI market, but also raising environmental impact concerns.
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- Surge in Economic Investment: The data center projects are projected to generate around $47 billion in new investments for the region, creating thousands of high-tech jobs and providing millions in new tax revenues, thereby driving transformative economic and community development.
- State-Specific Savings Details: Customers in Mississippi will save over $2 billion, Arkansas customers will benefit from up to $1.7 billion in savings, and Louisiana customers will enjoy approximately $800 million in savings, achieved through cost-sharing from grid infrastructure projects and new power generation facilities.
- Regulatory Support Assurance: The oversight from state public service commissions ensures that data center projects do not negatively impact existing customers' electricity prices and reliability, with Entergy's agreements designed to protect customer interests, showcasing strong market competitiveness.
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White House Event: The meeting took place at the White House, highlighting the collaboration between government and tech leaders on energy concerns.
See More
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- Power Plant Approval: xAI's subsidiary MZX Tech LLC received authorization to build a power plant with 41 natural gas turbines in Southaven, Mississippi, aimed at supplying power to nearby data centers, a decision that has sparked significant local opposition due to environmental pollution concerns.
- Community Protests: Despite attempts by the NAACP and other civil rights organizations to delay the meeting to avoid conflicts with primary elections, the MDEQ proceeded with the vote on election day, leading to community dissatisfaction over the decision-making process and perceived neglect of local voices and environmental impacts.
- Legal Challenges Ahead: The NAACP and Southern Environmental Law Center plan to sue xAI for operating natural gas turbines without federal permits, alleging that the company understated emissions in its application, which could pose health risks to the community.
- Rising Energy Demands: As xAI plans to construct a new data center in Southaven, the anticipated increase in energy demand raises concerns about local environmental quality and residents' quality of life, particularly regarding noise and air pollution issues.
See More
Musk Plans Natural Gas Power Plant in Southaven
- Environmental Controversy: The Mississippi Department of Environmental Quality is set to hold a meeting on Election Day 2026 to decide on key permits for Musk's xAI to build a natural gas power plant in Southaven, which has sparked strong opposition from the NAACP and other civil rights and environmental groups, arguing that the timing conflicts with residents' voting rights.
- Community Opposition: The NAACP has submitted a letter to the environmental agency requesting the meeting be postponed and moved closer to the facility to allow affected residents to participate, highlighting the community's strong discontent with xAI's plans and concerns over air quality and health issues.
- Post-Merger Investment Plans: Following its merger with SpaceX, xAI's valuation reached $1.25 trillion, with plans to invest in a power plant and large data center in Southaven, demonstrating the company's ambition in the rapidly growing generative AI market, but also raising environmental impact concerns.
- Increased Legal Risks: The NAACP has filed a notice of intent to sue xAI for alleged Clean Air Act violations, pointing out that the company has been operating multiple
See More
Entergy Announces $5 Billion Savings for Customers in Three States
- Significant Customer Savings: Entergy announced approximately $5 billion in savings over the next 20 years for 2.3 million customers in Arkansas, Louisiana, and Mississippi, stemming from customer agreements with data centers, which are expected to significantly reduce customer electricity bills.
- Surge in Economic Investment: The data center projects are projected to generate around $47 billion in new investments for the region, creating thousands of high-tech jobs and providing millions in new tax revenues, thereby driving transformative economic and community development.
- State-Specific Savings Details: Customers in Mississippi will save over $2 billion, Arkansas customers will benefit from up to $1.7 billion in savings, and Louisiana customers will enjoy approximately $800 million in savings, achieved through cost-sharing from grid infrastructure projects and new power generation facilities.
- Regulatory Support Assurance: The oversight from state public service commissions ensures that data center projects do not negatively impact existing customers' electricity prices and reliability, with Entergy's agreements designed to protect customer interests, showcasing strong market competitiveness.
See More
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AI and Electricity Costs: President Donald Trump and tech executives discussed strategies to prevent AI data centers from increasing consumer electricity bills.
White House Event: The meeting took place at the White House, highlighting the collaboration between government and tech leaders on energy concerns.
See More
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- Market Volatility Factors: The U.S. stock market has shown mixed performance in 2026, primarily influenced by concerns over AI investment sustainability, Trump's tariffs, and geopolitical conflicts in the Middle East, which have heightened the appeal of low-beta stocks for investors seeking stability.
- Hershey's Performance: Hershey (HSY) is projected to achieve revenue and earnings growth rates of 4.8% and 29.3% for 2026, respectively, with the Zacks consensus estimate for earnings improving by 16.7% over the past 30 days, indicating strong performance and innovation in the snack market.
- BHP Group Dynamics: BHP (BHP) reported a 1% decline in iron ore output but a 4% increase in copper production in Q1 2026, with projected iron ore production between 258-269 million tons, reflecting stability in the global mining market and confidence in future growth.
- Atmos Energy Outlook: Atmos Energy (ATO) expects revenue and earnings growth rates of 18.8% and 9% for 2026, respectively, and has enhanced profitability and shareholder value through strategic acquisitions and new customer additions, showcasing strong potential amid rising natural gas demand.
See More
Trump Pushes Energy Commitment from Data Centers
- Political Commitment: In his State of the Union address, Trump mentioned securing a pledge from major tech companies to supply power for data centers, although details remain unclear, this could impact future electricity supply and cost structures.
- Growing Power Demand: NextEra Energy plans to build 15 gigawatts of new power capacity to meet data center demands, indicating a shift towards gas generation while emphasizing renewable energy, reflecting changing policy directions.
- Market Dynamics: With accelerated data center construction, the U.S. is expected to face a net negative power supply by 2029, tightening the electricity market and boosting market share for independent power producers.
- Investment Opportunities: Wells Fargo has named Constellation Energy as its top pick among independent power producers, projecting a 40% stock price increase, while other independent producers like NRG and Talen are also viewed positively, indicating optimistic sentiment towards data center-related investments.
See More
