PG&E Sees Record Demand for Data Centers and Reaffirms Guidance Amid Q2 Strength

PG&E Corporation's Q2 results and growing data center demand have sparked short-term momentum for the company. Its data center demand pipeline has expanded to 10 GW over the next 10 years, positioning it as a critical enabler for AI and digital transformation sectors. The company has reaffirmed its non-GAAP core EPS guidance for FY25 and reported achievements in connecting new electric customers and EV charging ports. PG&E gained 8.43% this week despite a 17.73% annual decline.

PG&E Corporation (NYSE: PCG) reported its Q2 FY2025 earnings on July 30, 2025, with key financial highlights and strategic progress in data center demand. The company's non-GAAP core earnings per share (EPS) were $0.31, missing analyst estimates by 3.1% and remaining flat from the prior year. GAAP revenue of $5.90 billion missed consensus by 5.5% and slipped 1.5% year-over-year. GAAP earnings guidance for FY2025 was reduced, while non-GAAP core EPS guidance was reaffirmed [1].

The quarter saw a modest performance for the utility, with operational progress offset by persistent financial headwinds. Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted. The electric segment generated $4.41 billion in revenue, down from prior-year levels, while natural gas revenue dropped to $1.484 billion. The cost of electricity and natural gas both fell year-over-year—by 21.5% and 45.6%, respectively—which helped offset modest increases in operating and maintenance spending compared to the prior year. Wildfire-related claims and wildfire fund expenses rose nearly 40% compared to the prior year [1].

PG&E's data center demand pipeline has expanded significantly, now at 10 GW over the next 10 years, up from 8.7 GW reported in May and 5.5 GW in February. This growth reflects the company's strategic focus on meeting increasing demand for data centers, which are critical enablers for AI and digital transformation sectors. PG&E estimates this growth could lower customer electric bills by 10% or more, create tens of thousands of jobs, and generate billions in revenue and property tax [2].

The company continues to invest heavily in its wildfire mitigation programs, with 32 miles of underground powerlines and 103 miles of system hardening completed. It plans further investments—approximately 700 miles of undergrounding and 500 miles of additional safety upgrades—across 2025 and 2026. The U.S. Nuclear Regulatory Commission completed a positive review of the Diablo Canyon Power Plant, ensuring the company's ability to provide reliable baseload electricity and support California's carbon reduction targets [1].

For the quarter, wildfire-related costs net of recoveries totaled $40 million after tax. The company noted a long safety record without employee fatalities, reaching 814 days—its best run in more than 25 years as of April 2025. However, legacy legal costs and non-core items continue to affect adjusted (non-GAAP core) results and warrant attention going forward. The company mainly prioritizes reinvestment in the business to support its capital plans [1].

PG&E gained 8.43% this week despite a 17.73% annual decline, indicating short-term momentum driven by the company's strategic progress and investor confidence in its long-term growth aspirations. Management reaffirmed its non-GAAP core EPS forecast at $1.48 to $1.52 per share for FY2025, citing confidence in ongoing cost reduction efforts and the capital plan. However, management lowered its GAAP guidance to a range of $1.26 to $1.32 per share, down from the previous range of $1.29 to $1.35, primarily due to unrecoverable interest expense and other residual cost pressures [1].

In conclusion, PG&E's Q2 results and growing data center demand have sparked short-term momentum for the company. The company's strategic focus on operational safety, regulatory engagement, and large-scale grid upgrades positions it well for long-term growth opportunities. Investors should pay close attention to regulatory decisions, the pace of wildfire mitigation efforts, and growth in large-load demand segments such as data centers and vehicle electrification.

References:
[1] https://www.aol.com/finance/pg-e-pcg-q2-revenue-070150509.html
[2] https://www.carmichaeltimes.com/2025/08/11/542520/pg-e-data-center-demand-pipeline-swells-to-10-gigawatts