Dominion Energy: An Investment Opportunity in AI Infrastructure
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3d ago
0mins
Should l Buy D?
Source: Fool
- Growing Power Demand: As AI infrastructure rapidly expands, Dominion Energy plays a crucial role in Virginia's data center market, supplying power to over 35% of the world's hyperscale data centers, which drives sustained revenue growth for the company.
- Strong Customer Demand: CEO Robert Blue noted that there is a continued appetite for additional power supply from data center customers, with 450 data centers already connected, which is expected to further boost sales and enhance market competitiveness.
- Improved Profitability: In the third quarter, Dominion Energy's operating earnings rose 10.2% year-over-year to $921 million, with earnings per share increasing by 8% to $1.06, and management projects annualized EPS growth of 5% to 7% through 2029, indicating robust profitability.
- Attractive for Investors: With a current dividend yield of 4.4% and a price-to-earnings ratio of 19.9, which is lower than the Nasdaq-100 and S&P 500, Dominion Energy's stock appears undervalued, making it appealing to income-focused investors.
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Analyst Views on D
Wall Street analysts forecast D stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for D is 64.36 USD with a low forecast of 59.00 USD and a high forecast of 70.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
12 Analyst Rating
2 Buy
9 Hold
1 Sell
Hold
Current: 62.520
Low
59.00
Averages
64.36
High
70.00
Current: 62.520
Low
59.00
Averages
64.36
High
70.00
About D
Dominion Energy, Inc. provides regulated electricity service to about 3.6 million homes and businesses in Virginia, North Carolina, and South Carolina, and regulated natural gas service to 500,000 customers in South Carolina. It is a developer and operator of regulated offshore wind and solar power and the producer of carbon-free electricity in New England. Its Dominion Energy Virginia segment is composed of Virginia Power’s regulated electric transmission, distribution, and generation operations, which serve homes and businesses in Virginia and North Carolina. Its Dominion Energy South Carolina segment consists of DESC’s generation, transmission, and distribution of electricity to customers in the central, southern and southwestern portions of South Carolina and the distribution of natural gas to residential, commercial and industrial customers in South Carolina. Its Contracted Energy segment includes non-regulated electric generation fleet and renewable natural gas operations.
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.
Dominion Energy and Enbridge's Green Energy Strategies
- Renewable Energy Investment: Dominion Energy plans to invest $50 billion over the next five years, with over 80% allocated for zero-carbon power generation and grid modernization, aiming to meet the surging demand from data centers and enhance its competitive edge in the green energy market.
- Surging Power Demand: The company serves over 3.6 million homes and businesses in Virginia and North Carolina, experiencing a spike in electricity demand that is expected to drive annual revenue growth exceeding 25%, solidifying its leadership position in the utility sector.
- Dividends and Financial Health: While Dominion's dividend yield stands at approximately 4.3%, its high payout ratio of 87% raises concerns; however, its record of 392 consecutive quarters of dividends reflects stable cash flows, bolstering investor confidence.
- Enbridge's Growth Potential: Enbridge's renewable energy segment saw a 16% year-over-year increase in EBITDA to $100 million, and although its fossil fuel operations account for 60% of total revenue, investments in renewable projects indicate significant future growth potential.
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Comparative Analysis of Enbridge and Dominion Energy's Green Strategies
- Dominion's Market Advantage: Dominion Energy serves over 3.6 million homes and businesses in Virginia, North Carolina, and South Carolina, with renewable projects generating over 2,500 megawatts of power, enough for 625,000 homes, highlighting its strong growth potential in the green energy sector amid surging data center demand.
- Stable Financial Performance: Dominion's earnings per share (EPS) rose 6% year-over-year to $1.16, with operating earnings increasing 10% to $921 million, and management expects annual EPS growth of 5% to 7% over the next five years, supporting its ongoing dividend payments.
- Enbridge's Transition Challenges: While Enbridge still relies heavily on fossil fuel operations for about 60% of its revenue, its renewable energy segment saw EBITDA rise 16% year-over-year to $100 million, indicating potential in its green energy transition efforts.
- Dividend Appeal: Enbridge offers a dividend yield of approximately 5.4%, and despite a payout ratio exceeding 100%, management is committed to increasing dividends, making it an attractive option for income-focused investors.
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OpenAI Commits $1.4 Trillion to AI Infrastructure Development
- Massive Investment Plan: OpenAI CEO Sam Altman announced a commitment of $1.4 trillion to develop 30 gigawatts of computing power, aiming to add 1 gigawatt weekly, which will significantly enhance AI infrastructure and attract more investor interest in related sectors.
- Nvidia Market Dominance: Nvidia controls approximately 85% of the AI chip market, with Q3 2025 quarterly revenue soaring 62% year-over-year to exceed $57 billion, resulting in a market cap of $4.58 trillion, showcasing its strong competitive edge in AI hardware and expected to continue leading the market.
- Micron Technology Growth: Micron Technology reported a 57% year-over-year revenue increase to $13.6 billion in Q1 of fiscal 2026, with free cash flow surging 7,852%, indicating robust performance in the AI market, and plans to expand market share through new factory constructions.
- Dominion Energy Benefits: Dominion Energy achieved an 8.36% revenue growth in Q3 2025, and as one of the largest power companies in the U.S., its strategic location positions it to benefit from the increasing demand from data centers, making it a key beneficiary of AI infrastructure investments.
See More
Dominion Energy: An Investment Opportunity in AI Infrastructure
- Growing Power Demand: As AI infrastructure rapidly expands, Dominion Energy plays a crucial role in Virginia's data center market, supplying power to over 35% of the world's hyperscale data centers, which drives sustained revenue growth for the company.
- Strong Customer Demand: CEO Robert Blue noted that there is a continued appetite for additional power supply from data center customers, with 450 data centers already connected, which is expected to further boost sales and enhance market competitiveness.
- Improved Profitability: In the third quarter, Dominion Energy's operating earnings rose 10.2% year-over-year to $921 million, with earnings per share increasing by 8% to $1.06, and management projects annualized EPS growth of 5% to 7% through 2029, indicating robust profitability.
- Attractive for Investors: With a current dividend yield of 4.4% and a price-to-earnings ratio of 19.9, which is lower than the Nasdaq-100 and S&P 500, Dominion Energy's stock appears undervalued, making it appealing to income-focused investors.
See More
Utility Stocks Poised for Strong Growth Amid AI Demand
- Utility Index Performance: The Vanguard Utilities Index Fund ETF has risen over 11% in the past 12 months, indicating strong returns for this typically sleepy sector, reflecting sustained growth in power demand.
- NextEra Energy Growth Potential: NextEra Energy's adjusted earnings per share grew over 8% last year, with 8.7 gigawatts of new generation and storage projects, and it expects to grow earnings per share at over 8% annually through 2035, supporting its plans to increase dividends in the coming years.
- Dominion Energy Investment Plans: Dominion Energy is collaborating with data centers and plans to invest $50 billion between 2025 and 2029 to support power demand, particularly in Virginia, where power demand surged 30% last year and is expected to continue growing.
- Dual Return Potential: NextEra and Dominion are expected to be the biggest beneficiaries of the AI power surge, and combined with their dividends, this will drive strong shareholder returns, making them top utility stocks to buy this month.
See More
AI Data Centers Drive Surge in Power Demand
- Surge in Power Demand: Power demand in Virginia surged by 30% due to the rise of AI data centers, prompting Dominion Energy to plan a $50 billion investment from 2025 to 2029 to support its utility operations and maintain its leadership in this rapidly growing market.
- Renewable Energy Leader: NextEra Energy achieved over 8% growth in adjusted earnings per share in 2025 and brought 8.7 gigawatts of new generation and storage projects online last year, showcasing its strong growth potential in renewable energy, with expectations of over 8% annual earnings growth through 2035.
- Major Investment Projects: Dominion's Coastal Virginia Offshore Wind project is expected to deliver nearly 3 gigawatts of power, with 50% funding from partner Stonepeak, and is on track for full completion in 2027, further driving its earnings growth.
- Shareholder Return Potential: With dividend yields of 2.5% for NextEra Energy and over 4% for Dominion Energy, combined with robust earnings growth, both companies are expected to deliver double-digit annual returns, making them top utility stocks to buy this month.
See More
Dominion Energy and Enbridge's Green Energy Strategies
- Renewable Energy Investment: Dominion Energy plans to invest $50 billion over the next five years, with over 80% allocated for zero-carbon power generation and grid modernization, aiming to meet the surging demand from data centers and enhance its competitive edge in the green energy market.
- Surging Power Demand: The company serves over 3.6 million homes and businesses in Virginia and North Carolina, experiencing a spike in electricity demand that is expected to drive annual revenue growth exceeding 25%, solidifying its leadership position in the utility sector.
- Dividends and Financial Health: While Dominion's dividend yield stands at approximately 4.3%, its high payout ratio of 87% raises concerns; however, its record of 392 consecutive quarters of dividends reflects stable cash flows, bolstering investor confidence.
- Enbridge's Growth Potential: Enbridge's renewable energy segment saw a 16% year-over-year increase in EBITDA to $100 million, and although its fossil fuel operations account for 60% of total revenue, investments in renewable projects indicate significant future growth potential.
See More
Comparative Analysis of Enbridge and Dominion Energy's Green Strategies
- Dominion's Market Advantage: Dominion Energy serves over 3.6 million homes and businesses in Virginia, North Carolina, and South Carolina, with renewable projects generating over 2,500 megawatts of power, enough for 625,000 homes, highlighting its strong growth potential in the green energy sector amid surging data center demand.
- Stable Financial Performance: Dominion's earnings per share (EPS) rose 6% year-over-year to $1.16, with operating earnings increasing 10% to $921 million, and management expects annual EPS growth of 5% to 7% over the next five years, supporting its ongoing dividend payments.
- Enbridge's Transition Challenges: While Enbridge still relies heavily on fossil fuel operations for about 60% of its revenue, its renewable energy segment saw EBITDA rise 16% year-over-year to $100 million, indicating potential in its green energy transition efforts.
- Dividend Appeal: Enbridge offers a dividend yield of approximately 5.4%, and despite a payout ratio exceeding 100%, management is committed to increasing dividends, making it an attractive option for income-focused investors.
See More
OpenAI Commits $1.4 Trillion to AI Infrastructure Development
- Massive Investment Plan: OpenAI CEO Sam Altman announced a commitment of $1.4 trillion to develop 30 gigawatts of computing power, aiming to add 1 gigawatt weekly, which will significantly enhance AI infrastructure and attract more investor interest in related sectors.
- Nvidia Market Dominance: Nvidia controls approximately 85% of the AI chip market, with Q3 2025 quarterly revenue soaring 62% year-over-year to exceed $57 billion, resulting in a market cap of $4.58 trillion, showcasing its strong competitive edge in AI hardware and expected to continue leading the market.
- Micron Technology Growth: Micron Technology reported a 57% year-over-year revenue increase to $13.6 billion in Q1 of fiscal 2026, with free cash flow surging 7,852%, indicating robust performance in the AI market, and plans to expand market share through new factory constructions.
- Dominion Energy Benefits: Dominion Energy achieved an 8.36% revenue growth in Q3 2025, and as one of the largest power companies in the U.S., its strategic location positions it to benefit from the increasing demand from data centers, making it a key beneficiary of AI infrastructure investments.
See More
Dominion Energy: An Investment Opportunity in AI Infrastructure
- Growing Power Demand: As AI infrastructure rapidly expands, Dominion Energy plays a crucial role in Virginia's data center market, supplying power to over 35% of the world's hyperscale data centers, which drives sustained revenue growth for the company.
- Strong Customer Demand: CEO Robert Blue noted that there is a continued appetite for additional power supply from data center customers, with 450 data centers already connected, which is expected to further boost sales and enhance market competitiveness.
- Improved Profitability: In the third quarter, Dominion Energy's operating earnings rose 10.2% year-over-year to $921 million, with earnings per share increasing by 8% to $1.06, and management projects annualized EPS growth of 5% to 7% through 2029, indicating robust profitability.
- Attractive for Investors: With a current dividend yield of 4.4% and a price-to-earnings ratio of 19.9, which is lower than the Nasdaq-100 and S&P 500, Dominion Energy's stock appears undervalued, making it appealing to income-focused investors.
See More
Utility Stocks Poised for Strong Growth Amid AI Demand
- Utility Index Performance: The Vanguard Utilities Index Fund ETF has risen over 11% in the past 12 months, indicating strong returns for this typically sleepy sector, reflecting sustained growth in power demand.
- NextEra Energy Growth Potential: NextEra Energy's adjusted earnings per share grew over 8% last year, with 8.7 gigawatts of new generation and storage projects, and it expects to grow earnings per share at over 8% annually through 2035, supporting its plans to increase dividends in the coming years.
- Dominion Energy Investment Plans: Dominion Energy is collaborating with data centers and plans to invest $50 billion between 2025 and 2029 to support power demand, particularly in Virginia, where power demand surged 30% last year and is expected to continue growing.
- Dual Return Potential: NextEra and Dominion are expected to be the biggest beneficiaries of the AI power surge, and combined with their dividends, this will drive strong shareholder returns, making them top utility stocks to buy this month.
See More
AI Data Centers Drive Surge in Power Demand
- Surge in Power Demand: Power demand in Virginia surged by 30% due to the rise of AI data centers, prompting Dominion Energy to plan a $50 billion investment from 2025 to 2029 to support its utility operations and maintain its leadership in this rapidly growing market.
- Renewable Energy Leader: NextEra Energy achieved over 8% growth in adjusted earnings per share in 2025 and brought 8.7 gigawatts of new generation and storage projects online last year, showcasing its strong growth potential in renewable energy, with expectations of over 8% annual earnings growth through 2035.
- Major Investment Projects: Dominion's Coastal Virginia Offshore Wind project is expected to deliver nearly 3 gigawatts of power, with 50% funding from partner Stonepeak, and is on track for full completion in 2027, further driving its earnings growth.
- Shareholder Return Potential: With dividend yields of 2.5% for NextEra Energy and over 4% for Dominion Energy, combined with robust earnings growth, both companies are expected to deliver double-digit annual returns, making them top utility stocks to buy this month.
See More
