Executive Summary / Key Takeaways

• NextEra Energy (NEE) is strategically positioned to capitalize on America's "golden age of power demand," driven by AI, reshoring, and electrification, through its dual-engine model of Florida Power & Light (FPL) and NextEra Energy Resources (NEER).
• The company delivered strong Q3 2025 adjusted earnings per share (EPS) growth of 9.7% year-over-year, with a 9.3% increase through the first nine months, and reaffirms its commitment to achieving the top end of its adjusted EPS guidance ranges through 2027.
• Significant capital investments are planned, including approximately $40 billion for FPL over the next four years and a nearly 30-gigawatt renewables and storage backlog for NEER, providing substantial growth visibility.
• NextEra's technological leadership in renewables and storage, coupled with strategic supply chain diversification and a landmark partnership with Google to recommission the Duane Arnold nuclear plant, fortifies its competitive moat.
• The company's robust financial health, characterized by strong operating cash flow and effective interest rate hedging, supports its ambitious growth plans and a projected 10% annual dividend growth through at least 2026.

America's Energy Imperative and NextEra's Foundational Strength

The United States stands at the precipice of an unprecedented surge in electricity demand, often dubbed a "golden age of power demand." This demand is not merely theoretical; it is "sudden and sharp," emanating from all sectors of the economy, including residential, commercial, industrial, oil and gas, and critically, the burgeoning needs of artificial intelligence (AI) and the reshoring of manufacturing. Projections indicate that demand growth over the next decade is expected to exceed the last three decades combined, necessitating a rapid and comprehensive expansion of the nation's energy infrastructure.

At the heart of this transformative period is NextEra Energy, Inc. (NEE), a company with a century-long legacy of powering growth, tracing its roots back to the 1925 founding of Florida Power & Light Company (FPL). NextEra Energy has evolved into a dual-engine powerhouse, comprising FPL, America's largest electric utility, and NextEra Energy Resources (NEER), a world leader in renewables and storage. This integrated model, coupled with its position as one of the largest natural gas-fired generation fleet operators and nuclear operators in the U.S., allows NextEra to pursue an "all-of-the-above" energy strategy. This pragmatic approach recognizes that meeting the immediate and future electricity needs of the country requires leveraging all available energy forms, from rapidly deployable renewables to baseload nuclear and flexible natural gas. NextEra's foundational strength lies in its "world-class development platform," enabling it to efficiently build low-cost generation and transmission infrastructure across its national footprint.

NextEra Energy's competitive positioning is formidable. The company's non-fuel operations and maintenance (O&M) costs are 70% lower than the national average and over 50% lower than its closest industry peer, a testament to its relentless focus on efficiency. This operational prowess, combined with a strong balance sheet and extensive supply chain capabilities, positions NextEra as a preferred partner for large-scale energy solutions, particularly for hyperscalers and data center operators. While competitors like Duke Energy (DUK), Southern Company (SO), Dominion Energy (D), and Exelon Corporation (EXC) also operate in the utility and energy generation sectors, NextEra's aggressive focus on renewable energy development and its proven ability to execute large-scale projects provide a distinct advantage. The company's leadership in renewable energy deployment and strategic adaptability often translate into stronger growth prospects in evolving markets compared to competitors who may prioritize stability through a more traditional energy mix.

Technological Edge and Operational Excellence

NextEra Energy's strategic advantage is deeply rooted in its technological differentiation and operational excellence across a diverse energy portfolio. The company is not merely an energy provider; it is an infrastructure developer that leverages innovation to deliver low-cost, reliable power.

In renewables and storage, NextEra Energy is a world leader, with its NEER segment being the largest generator of wind and solar energy globally. The company's ability to develop and deploy these projects rapidly—wind in 12 months, solar in 18 months, and storage in 15 months—is a critical differentiator in a market demanding immediate capacity. Battery storage, in particular, is highlighted as a "game changer." It is "two times cheaper than gas-fired plants available now" and offers superior flexibility for grid interconnection. NextEra's proactive approach to supply chain management, including securing domestic battery supply contracts, ensures that its battery storage solutions are "derisked from a FEOC standpoint" and offer "favorable pricing" to customers, creating a "significant competitive advantage." This strategic sourcing means NextEra has "negligible" tariff exposure on batteries, a stark contrast to some competitors who may face significant cost pressures.

Nuclear energy is re-emerging as a critical baseload component, and NextEra is at the forefront of this shift. The company's planned recommissioning of the 615-megawatt Duane Arnold Energy Center in Iowa, in partnership with Google , is a landmark initiative. Expected to be fully operational by the first quarter of 2029, and potentially as early as Q4 2028, this project is projected to contribute "up to $0.16 of annual adjusted EPS on average over its first 10 years of operation." The plant is described as being in "great shape," with the same team that decommissioned it now leading the recommissioning, providing a high degree of certainty around execution. Beyond Duane Arnold, NextEra and Google are also exploring the development of advanced nuclear generation in the U.S., signaling a long-term commitment to this technology. While Small Modular Reactor (SMR) technology is being actively evaluated by NextEra's dedicated development team, the company maintains a pragmatic view, noting SMRs are "still 10 years away at scale in the best of scenarios and at a much higher price point than gas-fired generation."

In natural gas-fired generation, NextEra operates the largest fleet in the country and has a "roughly 20-gigawatt pipeline already developed" for new projects. A strategic framework agreement with GE Vernova (GEV), announced in 2024, aims to jointly develop gas-powered solutions, particularly for large load customers, by integrating them with renewables and storage. However, the company acknowledges the challenges in this sector, with the cost to build a gas-fired plant having "tripled in the last few years" due to turbine shortages, supply chain constraints, and a scarcity of skilled labor.

Finally, NextEra Energy's leadership extends to transmission infrastructure, with NextEra Energy Transmission (NEET) building a "stand-alone rate-regulated utility" within the company. This focus on both electric and gas transmission is crucial for connecting new generation to demand centers, further enhancing NextEra's integrated energy solutions.

These technological capabilities and operational strengths collectively form a robust competitive moat, allowing NextEra to offer cost-effective, reliable, and sustainable energy solutions that are highly attractive to a diverse customer base. The ability to combine various generation types and manage complex projects efficiently provides a distinct edge over competitors, particularly in a market characterized by rapidly increasing demand and evolving technological landscapes.

Florida Power & Light: A Blueprint for Regulated Growth

Florida Power & Light (FPL), NextEra Energy's regulated utility segment, serves as a compelling blueprint for sustainable growth within a constructive regulatory framework. FPL provides electricity to over six million customer accounts, serving approximately 12 million people across Florida. The state's robust economic expansion and continuous population influx, with Florida being one of the fastest-growing states in the U.S., underpin FPL's consistent demand growth.

FPL's operational excellence is evident in its top-decile reliability, which is nearly 60% better than the national average. This is achieved while maintaining typical residential bills that are 20% lower than two decades ago, when adjusted for inflation. A key driver of this efficiency is FPL's non-fuel O&M costs, which are 70% lower than the national average and over 50% lower than its closest industry competitor. The company's "Fleet Control Center" exemplifies its technological leadership, being the first in the industry to remotely operate a 20-gigawatt natural gas combined cycle fleet from a single location, enhancing predictive analytics and diagnostics.

Financially, FPL's performance is directly tied to its strategic capital investments. For the nine months ended September 30, 2025, FPL's net income increased by $356 million, primarily driven by ongoing investments in plant in service and other property. Its operating revenues for the same period rose by $826 million, largely due to storm cost recovery revenues, partly offset by lower fuel revenues. FPL's regulatory capital employed grew by approximately 8% year-over-year in Q3 2025, and its reported return on equity for regulatory purposes stood at approximately 11.7% for the 12 months ending September 2025.

Looking ahead, FPL plans to invest approximately $40 billion over the next four years in new energy infrastructure. This includes adding 5.3 gigawatts of solar, 3.4 gigawatts of battery storage, and a gas peaker plant, all aimed at meeting Florida's growing energy needs. FPL's proposed four-year base rate plan, effective January 2026, seeks base rate increases of $945 million in 2026 and $705 million in 2027. The proposal includes an allowed midpoint regulatory ROE of 10.95% (with a range of 9.95% to 11.95%) and maintains an equity ratio of 59.6%. If approved, typical residential customer bills are projected to increase by only about 2% annually between 2025 and 2029, keeping them well below the national average. This rate proposal, currently awaiting a decision from the Florida Public Service Commission by November 20, 2025, underscores FPL's commitment to providing stable, low-cost, and reliable service.

NextEra Energy Resources: Unlocking Competitive Energy Markets

NextEra Energy Resources (NEER) is the competitive engine of NextEra Energy, driving growth through large-scale development of clean energy solutions across North America. NEER's business model is centered on developing, constructing, and operating long-term contracted assets, primarily in wind, solar, and battery storage.

NEER continues its impressive origination streak, adding 3 gigawatts of new renewables and storage projects to its backlog in Q3 2025, marking the sixth consecutive quarter with additions of 3 GW or more. The total backlog now stands at nearly 30 gigawatts, providing substantial visibility into future growth, with projects expected to go into service through 2029. The third quarter also saw NEER's strongest-ever battery storage origination, with 1.9 gigawatts added to the backlog, reflecting robust customer demand for flexible capacity solutions. NEER boasts approximately 1.5 times coverage of the project inventory required to support its development expectations through 2030, mitigating development risk.

Financially, NEER's adjusted earnings grew approximately 13% year-over-year in Q3 2025, driven by higher earnings from new investments and customer supply. However, for the nine months ended September 30, 2025, NEER's net income decreased by $311 million, primarily due to a $0.70 billion pre-tax ($0.50 billion after-tax) impairment charge related to its investment in XPLR Infrastructure, LP, and higher financing costs. This was partly offset by increased earnings from new investments and the customer supply business. Clean energy tax credits for NEER increased by $142 million in Q3 2025 and $505 million for the nine-month period, reflecting the growth in its business.

A significant strategic initiative is NEER's focus on serving hyperscalers and data center customers. The company has nearly 3 gigawatts of energy projects executed with Google across the country, and its total renewables portfolio (operating and backlog) dedicated to technology and data center customers is 10.5 gigawatts. The partnership with Google to recommission the Duane Arnold nuclear plant is a prime example of NextEra's ability to provide large-scale, clean energy solutions for this rapidly growing customer segment.

NextEra's competitive advantages are further solidified by its proactive supply chain management. The company has spent the last three years diversifying and domesticating its supply chain, particularly for solar panels and batteries. This strategy has resulted in "less than $150 million in tariff exposure through 2028 on over $75 billion in expected capital spend," which is less than 0.2% of its projected capital expenditures. Management anticipates reducing this exposure "potentially down to zero" through contractual protections with suppliers and customers. This ability to mitigate tariff risks, especially in battery sourcing where it has secured U.S.-made batteries for a significant portion of its backlog, provides a substantial competitive edge over smaller developers who may lack the buying power or contractual leverage.

Financial Strength and Capital Allocation

For the third quarter of 2025, NextEra Energy delivered robust adjusted earnings per share (EPS) of $1.13, marking a 9.7% increase year-over-year. Through the first nine months of 2025, adjusted EPS increased by 9.3% year-over-year. GAAP net income attributable to NEE for Q3 2025 was $2.438 billion, or $1.18 per share, a significant increase from $1.852 billion, or $0.90 per share, in the prior-year quarter.

The company's operating cash flow generation remains strong, reaching $9.986 billion for the nine months ended September 30, 2025. This robust cash flow is crucial for funding NextEra's extensive capital requirements, which include expanding FPL's electric system and funding NEER's independent power projects. NextEra's total net available liquidity stood at approximately $16 billion as of September 30, 2025.

NextEra Energy actively manages its interest rate exposure, a critical factor in the current economic climate. The company has "nearly $37 billion of interest rate hedges in place," with a hedged risk-free rate of approximately 3.9%. This proactive hedging strategy significantly limits its sensitivity to interest rate fluctuations, with a hypothetical 50 basis point upward shift in the yield curve expected to have only a $0.01 to $0.03 impact on adjusted EPS in 2025 and 2026, and $0.03 to $0.05 in 2027. This disciplined approach to financial risk management underscores the company's commitment to maintaining a strong investment-grade credit rating, which is vital for accessing capital markets efficiently.

Capital allocation is strategically focused on high-growth opportunities while maintaining financial discipline. NextEra plans to invest roughly $120 billion across the country over the next four years. Despite the significant capital deployment, the company's capital recycling plan remains unchanged, with ample avenues available to monetize assets and optimize its portfolio.

Outlook, Guidance, and Risk Assessment

NextEra Energy's outlook is characterized by unwavering confidence in its ability to deliver sustained growth, underpinned by a clear strategic vision and robust execution capabilities. Management has consistently stated that they "will be disappointed if we're not able to deliver financial results at or near the top end of our adjusted earnings per share expectation ranges in 2025, 2026 and 2027." The company projects adjusted EPS in the range of $3.45 to $3.70 for 2025, $3.63 to $4.00 for 2026, and $3.85 to $4.32 for 2027. Furthermore, NextEra expects to grow its dividends per share at approximately 10% per year through at least 2026, off a 2024 base, reflecting strong operating cash flow growth that is anticipated to be at or above its adjusted EPS compound annual growth rate range.

This optimistic guidance is predicated on several key assumptions: continued robust electricity demand growth across the U.S., particularly from AI and data centers; a constructive regulatory environment supporting FPL's capital investments and rate recovery; successful execution of NEER's extensive project backlog; and effective management of financial risks, including interest rate and commodity price volatility. The recommissioning of the Duane Arnold nuclear plant, expected to contribute up to $0.16 of annual adjusted EPS on average over its first 10 years of operation, is a concrete example of a strategic initiative bolstering future earnings.

However, the investment thesis is not without its risks. NextEra Energy operates in a heavily regulated industry, making it susceptible to adverse regulatory and legislative changes. Potential reductions or eliminations of governmental incentives for clean energy, including tax laws and policies, could impact project economics and development. While the "One Big Beautiful Bill Act" provided some clarity on tax credits, the ongoing policy environment, including executive orders and trade actions, requires continuous monitoring. Development and operational risks, such as delays in project construction, cost overruns, or impacts from severe weather, could also affect financial performance. The impairment charge related to the XPLR investment in Q1 2025 serves as a reminder of the risks associated with equity method investees. Furthermore, the company's significant capital requirements and reliance on credit and capital markets expose it to disruptions or volatility in these markets, potentially affecting its ability to fund growth or increasing interest costs.

NextEra Energy actively mitigates these risks through its diversified portfolio, proactive supply chain management, contractual protections in customer and supplier agreements, and strong advocacy in Washington. The company's deep experience in project development and its strong balance sheet provide resilience against many of these challenges, allowing it to capitalize on opportunities where smaller, less capitalized competitors may falter.

Conclusion

NextEra Energy stands as a compelling investment in a rapidly evolving energy landscape, uniquely positioned to power America's burgeoning electricity demand. Its dual-engine model, comprising the stable, regulated growth of Florida Power & Light and the dynamic, competitive expansion of NextEra Energy Resources, provides a robust foundation for sustained value creation. The company's century-long history of operational excellence, coupled with its forward-leaning approach to technological innovation in renewables, storage, and nuclear, establishes a formidable competitive advantage.

With ambitious capital investment plans, a substantial project backlog, and strategic partnerships like the one with Google (GOOGL) for nuclear energy, NextEra Energy is not merely participating in the energy transition; it is leading it. The company's proactive risk management, particularly in supply chain diversification and interest rate hedging, further solidifies its financial resilience. While regulatory shifts and operational complexities present ongoing challenges, NextEra's proven track record of execution and its commitment to delivering at the high end of its financial guidance, coupled with consistent dividend growth, underscore its potential for long-term shareholder returns. NextEra Energy is a diversified energy leader, strategically aligned with the nation's energy future, offering a compelling blend of stability and growth.