Entergy Boosts Profit Forecast Amid AI-Driven Electricity Demand Surge and $40 Billion Investment

Entergy Corporation has revised its profit projections for the latter part of the decade, supported by increased plans for infrastructure spending to meet escalating electricity demand driven by artificial intelligence (AI) and electrification trends. The Louisiana-based utility provider expects U.S. power consumption to achieve unprecedented levels by 2025 and 2026, according to the U.S. Energy Information Administration. This rise in demand is attributed to the rapid expansion of AI-focused data centers and cryptocurrency operations, alongside heightened electricity use for heating and transport by residential and commercial entities.

In response to these evolving dynamics, Entergy has adjusted its profit outlook substantially. The company projects adjusted earnings per share between $4.70 and $5.00 for 2027, up from a previous forecast range of $4.65 to $4.95. Similarly, Entergy's forecast for 2028 has increased to $5.20 to $5.50 per share, from an earlier range of $5.10 to $5.40. Entergy's CEO, Drew Marsh, emphasized the company's strategic positioning to leverage these opportunities and deliver value to its stakeholders, reflected in Entergy's share price climbing 3.2% to $91.04.

Entergy is advancing plans for substantial infrastructure enhancements, boosting its four-year capital expenditure plan to $40 billion from a previously planned $37 billion. This expansion caters to anticipated AI-driven demand and aims to fortify the company's energy infrastructure against extreme weather events such as hurricanes. Entergy's investments include the addition of 3 gigawatts of solar capacity, 1.4 gigawatts of battery storage, and 8 gigawatts of natural gas-fired power plants.

The burgeoning demand for new power capacity has led Entergy to secure electric service agreements totaling around 8 gigawatts since the beginning of last year, supported by comprehensive strategies to facilitate industrial growth and economic development. Entergy has identified significant opportunities for expansion in Arkansas, predicting an approximate 13% increase in its four-year industrial sales growth rate. Its customer-centric approach aims to solidify its capacity offerings through vertical integration and bespoke technical solutions.

In further strategic developments, Entergy's pipeline of data center ventures spans between 5 and 10 gigawatts, with one gigawatt sufficient to power up to 1 million U.S. households. Louisiana utility regulators are deliberating Entergy's proposal to supply energy for the $10 billion Meta Platforms data center campus, with an impending decision slated for October.

Entergy has reported a commendable performance in its second quarter, achieving an adjusted profit of $1.05 per share, surpassing Wall Street expectations. This marks a significant increase from one year prior when adjusted earnings were reported at $0.11 per share. Entergy's bottom line for the quarter totaled $468 million, a substantial rise from $49 million in the previous year.

The company's resilience measures are progressing, with $400 million already invested in its Phase 1 accelerated resilience program. Entergy's proactive enhancements include energizing nine new substations and installing over 8,000 weather-hardened poles to fortify grid resilience against severe storms and hurricanes. Additionally, Entergy is awaiting approval for a $200 million resilience initiative for Entergy Texas.

Overall, Entergy's strategic alignments with rising power demands and concerted efforts in infrastructure development position the utility provider for sustained growth and enhanced value delivery in the forthcoming years.