PG&E Up 5% and Still Cheap vs Peers? Bargain, or Already Priced for AI Power FOMO?

PCG's recent move says the rerating has started

PG&E is no longer trading like the broken utility many investors once assumed it was. The stock is up approximately 5% over the past 30 days, and Wall Street firms maintain Buy ratings with price targets ranging from $22 to $28, well above the roughly $17 range where shares have been trading recently.

That helps explain the shift in tone. The old PG&E script still resonates: wildfire risk, grid reliability, and regulatory friction are real concerns for a utility with a long history of headline pressure. But investors are also starting to pay attention to a newer idea-that PG&E could benefit directly from rising electricity demand tied to AI infrastructure. With analysts pointing to data center projects in final engineering within PG&E's service area, the market is treating the name less like a cleanup story and more like a grid-constraint trade.

The quarter improved earnings, but not the valuation debate

The latest results support optimism, but they do not settle it. PG&E delivered adjusted earnings of $0.40 per share against a $0.36 consensus, while revenue totalled $5.9 billion, falling short of the $6.12 billion expected. At the same time, management reaffirmed its full-year earnings outlook.

That split is why the stock feels like a sentiment fight rather than a clean verdict. Bulls see operating discipline and better earnings power. Bears see a company that may be getting some credit before top-line demand fully shows up in the numbers. In this setup, more upside looks possible if execution stays clean and the AI-power narrative remains intact. If either of those weakens, the stock may start trading more like a momentum utility name than a deep bargain.

The key question is no longer whether electricity demand could rise. It is whether PG&E can turn that demand into earnings and shareholder returns quickly enough to justify a higher multiple. Analysts note data center projects in final engineering within PG&E's service area, and PG&E has outlined meaningful grid and safety investments, including more than 1,900 total miles of undergrounding and more than 2,000 miles of strengthened poles and covered powerlines by the end of 2027.

What still needs to be proven is how quickly those projects connect, how they affect the rate base, and how much of the spending translates into durable earnings growth. That is why PG&E looks more selectively attractive than obviously cheap. The recent move has already captured part of the positive narrative, so the next leg higher likely needs either stronger load growth, clearer monetization, or both.