Dominion Energy (NYSE: D) has one advantage that artificial intelligence companies lack – it has the ability to power data centers from various energy sources, including renewable energy.
The company is focusing its efforts on providing the constant round-the-clock power that data centers need to operate, especially as more companies adopt AI to improve efficiencies and conduct tasks faster in their industries.
Data centers are power-intensive
The company is the largest global electric utility, providing power to data centers. Dominion also said it is in additional discussions to provide more energy to the power-hungry data centers. Dominion’s upcoming projects include the potential for 47 gigawatts of brand-new data centers, or an increase of 17% in 2025.
Operating in the Carolinas and Virginia, Dominion provides electricity to 450 data centers in Virginia.
“We continue to see robust demand from data centers,” said Dominion CEO Robert Blue during a call with investors. “We’re developing resources across distribution, transmission, and generation to ensure we meet this critical need on a timely basis.”
Big tech is no longer the only industry that seeks more and more power each year. Dominion is preparing for additional surges in demand and plans to invest $50 billion from 2025 to 2029 in its infrastructure to ensure that all of its residential and industrial customers are satisfied.
Over the past five years, Dominion Energy’s stock has declined by 2o%. The decline could provide an opportunity for investors who want to invest alongside AI, but directly in those companies.
Renewable energy remains a priority
Dominion Energy is betting that its two latest projects will pay off in the future as more industries use AI and cloud computing in their everyday activities to accomplish their goals.
The company is also investing in providing more renewable energy in the future to provide resiliency.
Dominion’s executives said its most current clean energy project, the Coastal Virginia Offshore Wind project, is two-thirds completed and will power hundreds of thousands of homes.
Two large wind projects cleared legal hurdles recently. In September, a U.S. judge ruled that Orsted A/S, a Danish renewable energy company, could continue working on its Rhode Island wind project, stating that the current administration’s stop order did not provide sufficient rationale.
A federal judge ruled in October that Equinor, a Norwegian energy company, could resume its Empire Wind project in New York. The administration has flipped sides and approves of the wind project now.
Companies building expensive renewable energy projects now have “a much better fact pattern,” said Jefferies analyst Paul Zimbardo. “We assume the [Dominion CVOW] project gets completed successfully.”
Dominion’s large wind project is likely to be completed by the end of 2026, will improve the Naval Air Station Oceana’s power grid in Virginia Beach, and should benefit national security
“We do think it will get built,” said Nick Amicucci, an Evercore ISI analyst.
During the third quarter, the company surpassed its profit estimates due to more demand for power in Virginia and South Carolina. Dominion produced revenue of 4.53 billion, an increase from $3.94 billion a year ago. The company said it anticipates its 2025 operating earnings guidance to generate between $3.33 per share and $3.48 per share, compared to its previous estimate of $3.28 per share to $3.52 per share.
The stock reached a 52-week-high, trading at $62.52, a sign of a more positive sentiment from investors.
As the demand for AI and power both rise exponentially in the next decade, as more data centers are needed and will be constructed, Dominion Energy will likely benefit as its customers need a mix of various energy sources.
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