NextEra Energy: Buy Before the Next Phase of Growth

NextEra Energy, Inc. (NEE) delivered its strongest earnings in recent years as clean energy growth and rising electricity demand fueled performance in Q2 2025. Earnings per share continued to rise, with Florida Power & Light (FPL) driving growth through significant investments and low-cost delivery. At the same time, Energy Resources expanded its renewable backlog to meet soaring data centre demand.

This article presents the earnings performance, growth drivers, market outlook, and technical setup to evaluate the next move for NextEra Energy. The stock is showing positive momentum at long-term support levels, highlighting potential buying opportunities for long-term investors.

NextEra Energy Q2 Earnings Surge on Clean Energy Growth and Electricity Demand

NextEra Energy reported strong earnings in Q2 2025, with the net income increasing to $2.03 billion, which is the highest since Q2 2024.

Moreover, the earnings per share increased to $1.05, showing an incremental trend over the past years. This reflects healthy operational performance and disciplined financial execution.

FPL Drives Growth with Investments and Low-Cost Delivery

FPL remained the company’s core growth engine. The net income increased to $1.275 billion from $1.232 billion a year earlier. This increment came from continued capital investment and population-driven energy demand in Florida. FPL invested $2 billion in the quarter, targeting long-term grid upgrades and infrastructure.

Additionally, regulatory capital employed at FPL increased nearly 8% over the last year. This increase supports its strategy of reliable service and low-cost delivery. FPL operates a large gas-fired and nuclear fleet, giving it the flexibility to expand solar and storage capacity. Its mix of energy sources helps meet growing demand while keeping customer bills low.

FPL continues to benefit from clear regulatory support. Recently, the Florida Supreme Court upheld its 2021 settlement, thereby allowing future investments to move forward. Furthermore, in February, FPL proposed a four-year base rate plan. If this plan is approved, residential bills may increase by just 2.5% per year through 2029. However, they would remain about 20% below the national average.

NextEra Expands Renewables to Power Data Centre Demand

On the other hand, NextEra Energy Resources also posted strong results in Q2 2025. The net income for the Energy Resources segment has surged to $983 million from $552 million a year ago. This growth came from strong renewable project origination and customer demand from hyperscalers and data centres.

The unit added 3.2 GW to its project backlog during the quarter. That brings the total to nearly 30 GW, including 6 GW dedicated to technology and data centre customers. This will serve over 10.5 GW across the US after its completion. This positions NextEra Energy Resources to benefit from clean energy demand and digital infrastructure growth.

Strong Outlook with EPS Growth and Clean Energy Strategy

NextEra Energy expects strong long-term growth as electricity demand accelerates. After years of stagnation, demand is now rising sharply, fueled by digital infrastructure, electrification, and population growth.

This trend is supported by data from the EIA, which shows US electricity demand increasing after nearly two decades of flat consumption. This growth comes from the commercial and industrial sectors, particularly data centres and manufacturing.

Therefore, NextEra is focused on fast-to-deploy solutions such as renewables and storage, which are proving to be cost-effective. Moreover, onshore wind and solar, when paired with storage, are expected to remain the lowest-cost firmed energy resources by 2030. This strengthens the economic case for clean energy adoption.

NextEra’s financial outlook remains strong through 2027. The company expects adjusted EPS of $3.45 to $3.70 for 2025, followed by $3.63 to $4.00 in 2026 and $3.85 to $4.32 in 2027. It also plans to grow dividends per share by around 10% annually through 2026.

These projections reflect confidence in its renewables pipeline and the broader market shift. As electricity demand continues to grow, NextEra is well-positioned to lead the transition to low-cost, high-growth clean energy.

NextEra Energy Technicals Signal Bull Flag Breakout and Long-Term Growth

NextEra Energy has been trading in a parabolic uptrend over the past few decades. This trend is visible on the quarterly chart, which shows the stock reaching a record high of $93.73 in 2021. After hitting this record high, the price has been consolidating within a wide range.

This consolidation has formed a bull flag pattern, which is considered a strong bullish continuation signal. The quarterly chart also highlights strong reversal wicks in Q1 2020, Q4 2023, and Q2 2025, whereby the stock is pushing higher after forming the wicks. These repeated reversals at long-term support reinforce the strength of the bull flag structure.

Bull Flag Pattern Signals Transition from Growth Phase One to Phase Two

If the bull flag pattern breaks to the upside and the stock achieves a new record high, the next rally in NextEra Energy could be powerful. Based on its historical price action over the past decades, such a breakout would likely extend the long-term bullish momentum significantly. This is because the stock price has been in a parabolic surge for decades, and the bull flag formation has developed only over the last four years.

As observed in the chart below, the powerful rally from the 1970s to 2021 may be considered as growth phase one. The current consolidation within the bull flag pattern appears to be setting the stage for growth phase two.

Key Retracement Levels and Reversal Wicks Strengthen Bullish Momentum

To better understand the intense bullish price action and the key technical levels for long-term investors, the chart below highlights the significant low formed in October 2008. Specifically, this low can be termed as the global financial crisis low, marking the beginning of a powerful rally that carried NextEra Energy to a record high in December 2021.

Since then, the correction from those record levels has established strong support near the 50% retracement of the rally from the global financial crisis low, around $51.

Moreover, the stock price also formed a wick in April 2025 at the 38.2% retracement of the rally from the global financial crisis low. After creating this low, the price reversed higher and continues to trade in positive territory.

Overall, the combination of strong reversal patterns, bullish wick formations, and support at the 50% and 38.2% retracement levels suggests that NextEra Energy is preparing for another breakout. This setup points to the potential for a renewed long-term growth trend in the coming months.

V-Shaped and Rounding Bottom Patterns Highlight Breakout Readiness

The weekly chart for NextEra Energy highlights key technical levels and trend lines that are likely to trigger the stock’s next move. The long-term support line, shown as the red dotted trend line, marks the bottom formed in October 2023. From this low, the stock staged a strong reversal toward the key resistance area near $85.

This recovery formed a V-shaped pattern, and the recovery from April 2025 formed a rounding bottom pattern. A decisive break above the $85 level would open the way toward $93.70. Moreover, a breakout above $93.70 could trigger the next strong surge in NextEra Energy, confirming a continuation of its long-term bullish structure.

Based on this analysis, NextEra Energy appears to be building a strong foundation for its next phase of growth. Current price levels are considered attractive, and long-term investors may view this as an opportunity to accumulate positions with significant potential over the coming months and years.

Growth and Clean Energy Justify Valuation Premium

NextEra Energy trades at a P/E ratio of 26.60, which is noticeably higher than the utility sector average of 21.38. It also trades above key peers such as Duke Energy Corp. (DUK) at 20.19, Dominion Energy, Inc. (D) at 21.12, and The Southern Company (SO) at 24.45. The higher multiple suggests that the market is pricing in stronger growth expectations for NEE.

Investors appear willing to pay a premium for its leadership in renewables and its consistent financial execution. While the utility sector typically commands lower valuations due to its defensive profile, NextEra’s combination of regulated earnings and clean energy growth supports a higher valuation baseline.

On the other hand, the chart below shows the revenue growth of NextEra Energy with its peers. NextEra Energy posted a 47.02% increase in quarterly revenue during the past decade, far outperforming Dominion (31.31%), Southern (29.11%), and Duke (15.81%). This gap highlights NextEra’s superior execution in scaling renewable projects through its Energy Resources segment.

The company’s valuation remains supported by fundamentals and sector tailwinds. It leads in deploying low-cost wind and solar assets, which are projected to stay the cheapest firmed resources through 2030.

Although the stock trades at a higher P/E, it offers a combination of stable income, aggressive growth, and exposure to the energy transition. In this context, NextEra’s valuation appears justified and attractive for long-term investors seeking clean energy exposure with defensive characteristics.

Market Risks

NextEra Energy faces risks from uncertainty in interest rates. The increase in interest rates increases borrowing costs and reduces the relative appeal of utilities compared to bonds. Because NextEra relies on enormous capital spending for renewables and grid upgrades, prolonged high rates could slow growth and pressure returns.

NextEra also faces regulatory and policy risks. Its earnings depend on favourable rate approvals and strong clean energy support. Delays, legal challenges, or cost overruns in major projects could impact profitability. While demand from data centres and electrification offers growth, these risks may limit how quickly NextEra can translate opportunities into shareholder value.

From a technical perspective, any break below $41 will disturb the long-term bullish picture and induce a deeper correction.

Bottom Line

NextEra Energy remains one of the strongest players in the utility and clean energy sector. The company continues to deliver earnings growth supported by FPL’s regulated stability and Energy Resources’ renewable expansion. Rising electricity demand, digital infrastructure growth, and cost-effective clean energy position NextEra for long-term success. Its ability to combine defensive earnings with aggressive growth makes it unique among peers.

The stock trades at a premium valuation, but strong fundamentals support investor confidence. From a technical perspective, the price has reversed higher from long-term support zones, leaving strong wick candles. These wick formations within the bull flag pattern increase the likelihood of an upside breakout in NextEra Energy. A break above $93.70 could trigger a strong surge and push the stock into its next phase of growth. Investors may consider buying at current levels to capture the next surge.