Xcel Energy Inc. (NASDAQ:XEL) is one of the best infrastructure stocks to buy right now. On February 13, UBS upgraded Xcel Energy Inc. (NASDAQ:XEL) from Neutral to Buy and increased its price target to $89 from $81. Analyst William Appicelli made the upgrade. Analysts Turn Bullish on Xcel Energy (XEL) Amid Data Center Boom Appicelli noted that Xcel has a steady 9% earnings-per-share expansion, backed by full regulatory oversight, plus rising data center electricity needs that remain underappreciated in t ...

Core Insights - Xcel Energy Inc. reported its Q4 numbers, highlighting a significant increase in demand driven by data centers and AI, which is expected to positively impact the company's future performance [1] Company Performance - The surge in demand for data centers and AI is a key factor contributing to the company's growth outlook [1] Investment Perspective - The company is positioned well for long-term investors, particularly those with a 5-10 year investment horizon, focusing on a balanced portfolio of growth, value, and dividend-paying stocks [1]

Core Viewpoint - Soros Fund Management made significant adjustments to its investment portfolio in the fourth quarter, focusing on increasing exposure to tech giants while engaging in "buy high, sell low" strategies for energy and cryptocurrency stocks [1]. Group 1: Technology Sector Investments - The fund substantially increased its holdings in core technology stocks, including adding 161,000 shares of Microsoft (MSFT.US), 118,000 shares of Nvidia (NVDA.US), and approximately 66,000 shares of Apple [3]. - In the software and mobility sectors, the fund also increased its positions by acquiring approximately 216,000 shares of Atlassian (TEAM.US), 55,000 shares of Salesforce (CRM.US), and 119,000 shares of Uber (UBER.US) [3]. Group 2: Defensive and Growth Investments - In the defensive sector and consumer space, the fund increased its holdings in utility company Exelon (EXC.US) by approximately 488,000 shares and in gaming giant Electronic Arts (EA.US) by about 318,000 shares [3]. Group 3: Reduction in High Volatility and Financial Stocks - The fund reduced its positions in high-volatility and financial stocks, significantly cutting approximately 168,000 shares of Snowflake (SNOW.US) [4]. - It also reduced its holdings in Circle Internet Group (CRCL.US) by about 151,000 shares and in Interactive Brokers (IBKR.US) by approximately 813,000 shares, indicating a cautious stance towards the financial brokerage sector [5][6]. Group 4: New Positions and Exits - The fund opened new positions by purchasing gold-related assets such as New Gold (NGD.US) and established positions in DigitalBridge (DBRG.US), Blue Owl Capital (OWL.US), Exact Sciences (EXAS.US), and Xcel Energy (XEL.US) [7]. - It completely exited positions in KeyCorp (KEY.US), CareTrust REIT (CTRE.US), Cipher Mining (CIFR.US), and KKR & Co. (KKR.US), indicating a shift away from traditional banking and certain cryptocurrency mining stocks towards more stable or defensive sectors [7]. Group 5: Overall Strategy - The overall strategy of Soros Fund Management in the fourth quarter reflects a clear approach: embracing AI and core tech assets like Microsoft and Nvidia while avoiding high-volatility cloud and data companies like Snowflake, and hedging against macroeconomic uncertainties by investing in gold stocks. This "pick and choose" adjustment strategy highlights the pursuit of certainty and safety margins amid global economic uncertainties [7].

Group 1: Natural Gas Power Generation - The demand for baseload power generation is driving utilities to invest in modern natural gas-fired power plants, which offer operational flexibility and lower emissions [1] - Over 100 GW of new natural gas generation capacity has been announced in the U.S., although supply chain issues are causing delays [1] - Experts predict a strong near-term outlook for natural gas due to its ability to provide reliable power as the grid integrates more renewable energy sources [1] Group 2: CPV Basin Ranch Project - The CPV Basin Ranch Energy Center in Texas will have a generation capacity of 1,350 MW and is supported by a $1.1 billion loan from the Texas Energy Fund [2][3] - The project aims to enhance grid reliability following the February 2021 winter storm that caused widespread power outages [3] - CPV is committed to developing dispatchable power generation to meet Texas's growing energy demands [4] Group 3: Desert Sun Power Plant - Arizona Public Service (APS) plans to develop a 2,000-MW natural gas-fired Desert Sun Power Plant to support customer growth and data center investments [5] - The project will be executed in two phases, with Phase 1 expected to begin operations by late 2030 [5] - APS aims to maintain a balanced energy portfolio, adding 7,300 MW of new generation resources by 2028 [5] Group 4: Thurrock Power Project - The Thurrock Power project in the UK will feature a 450-MW flexible generation station designed to support grid reliability and integrate renewable energy [6][7] - The project is expected to be operational by late 2026 and will utilize Jenbacher engines for rapid start-up capabilities [7][8] - This project represents a significant milestone in the UK's energy transition towards a low-carbon power mix [8] Group 5: Xcel Energy Initiatives - Xcel Energy is investing in new gas-fired power plants in Texas and New Mexico, with a total capacity of 2,088 MW [9] - The company is transitioning from coal-fired generation to gas-fired units to meet growing energy demands [9] - Xcel's broader portfolio includes 17 new power initiatives aimed at adding over 5,000 MW of capacity by 2030 [9] Group 6: Siemens Energy Projects - Siemens Energy is involved in multiple international projects, including gas-fired plants in Saudi Arabia and Iraq, with a focus on hydrogen-ready technology [10] - The company is also developing modular gas-powered solutions for the data center sector, providing scalable power generation [10] Group 7: Net Power's Project Permian - Net Power is advancing its Project Permian clean firm power hub in West Texas, utilizing carbon capture technology [11][12] - The project aims for commercial operations by 2028, with a focus on meeting market demand for clean firm power [12] Group 8: Vistra Corp. Developments - Vistra Corp. plans to invest over $1 billion in new natural gas-fired generation capacity in Texas, targeting 860 MW from two new units [13] - The company aims to add more than 2,000 MW of new capacity in ERCOT between 2024 and 2028 [13] - Vistra is also repurposing the coal-fired Coleto Creek Power Plant to natural gas, restoring approximately 630 MW of generation to the grid [14] Group 9: Duke Energy's Expansion Plans - Duke Energy is proposing a $3.2 billion natural gas-fired plant in South Carolina, with a capacity of 1,400 MW [14] - The company plans to add about 9.7 GW of natural gas-fired generation capacity by 2033 across North and South Carolina [14]

Group 1: Strategic Agreements - Xcel Energy has entered into strategic agreements with GE Vernova and NextEra Energy to secure supply and development capacity for up to 6 GW of data center load, including five F-class gas turbines and multiple gigawatts of wind capacity [1][2] - The alliance with GE Vernova aims to support generation and grid projects into the 2030s, enhancing operational flexibility and cost affordability for Xcel Energy's customers [2][8] - The memorandum of understanding (MOU) with NextEra Energy focuses on co-developing generation, storage, and interconnections to serve data center projects, reflecting a long-standing partnership between the two companies [1][8] Group 2: Data Center Capacity and Growth - Xcel Energy has signed energy services agreements (ESAs) for over 2 GW of data center capacity, with a goal to reach 3 GW by the end of 2026 and 6 GW by the end of 2027 [10] - The company is pursuing large load tariff filings in multiple states to establish regulatory frameworks for data center contracting, with significant sales expected to ramp up in the 2029 to 2030 timeframe [10] - NextEra Energy is advancing discussions around data center "hub" developments, aiming to create scalable and cost-effective energy solutions for large load customers [8][9] Group 3: Manufacturing and Supply Chain - GE Vernova's gas power equipment backlog increased from 62 GW to 83 GW, driven by strong U.S. demand, with expectations to reach approximately 100 GW under contract by 2026 [3][4] - The company is expanding its manufacturing capacity significantly, adding over 200 new machines and nearly 1,000 production workers in 2025, with plans for further expansion in 2026 [7] - Pricing for current slot reservation agreements is running 10 to 20 points higher than existing backlog, indicating increased competition for gas turbine manufacturing capacity [4][5]

Core Insights - Xcel Energy Inc. (XEL) reported fourth-quarter 2025 operating earnings of 96 cents per share, slightly missing the Zacks Consensus Estimate of 97 cents, but showing an 18.5% increase from the previous year [1] - Total revenues for XEL were $3.56 billion, falling short of the Zacks Consensus Estimate of $3.72 billion by 4.4%, yet representing a 14.1% increase from $3.12 billion in the year-ago quarter [2] Financial Performance - The electric segment generated revenues of $2.8 billion, up 16.6% from $2.41 billion in the prior year [3] - Natural gas segment revenues increased by 6% to $737 million from $695 million year-over-year [3] - Total operating expenses rose by 7.5% year-over-year to $2.98 billion, driven by higher costs of natural gas sold, operating and maintenance expenses, and taxes [4] - Operating income surged by 67.1% year-over-year to $580 million [4] - Interest charges and financing costs increased by 26.3% from $319 million to $403 million [4] Customer Metrics - In 2025, Xcel Energy experienced a 0.7% growth in electric customer volume and a 0.8% increase in natural gas customer volume [5] - Natural gas sales volume decreased by 1.2%, while electric sales volume increased by 2.2% [5] - Xcel Energy's residential bills for electric and natural gas are 28% and 12% lower than the national average, respectively [5] Future Guidance - Xcel Energy reaffirmed its 2026 earnings per share guidance in the range of $4.04-$4.16, with the Zacks Consensus Estimate at $4.12 [6] - The company anticipates a 3% increase in retail electric sales and a 1% increase in natural gas sales volumes for 2026 [6] Long-term Strategy - Xcel Energy aims for long-term annual earnings per share growth of 6-8% and dividend growth of 4-6% [8] - The company plans to invest $60 billion from 2026 to 2030 to enhance its infrastructure, including adding 7,500 megawatts of renewable generation, 3,000 megawatts of natural gas generation, and 1,900 megawatts of energy storage [8]

Financial Data and Key Metrics Changes - Xcel Energy reported ongoing earnings of $3.80 per share for 2025, an increase from $3.50 per share in 2024, marking the 21st consecutive year of meeting or exceeding ongoing earnings guidance [6][22] - GAAP earnings for 2025 were $3.42 per share, impacted by a $300 million charge related to the Marshall Wildfire settlement [4] - Full-year weather-adjusted electric sales increased by 2.2%, with expectations for a 3% increase in 2026 [23] Business Line Data and Key Metrics Changes - The company invested nearly $12 billion in 2025, the largest one-year total, focusing on modernizing and expanding the grid [9] - O&M expenses increased by $190 million in 2025, primarily due to wildfire mitigation costs and higher maintenance costs [23] - The conversion of the Harrington coal plant to natural gas and the completion of wind repowering projects contributed to operational milestones [10] Market Data and Key Metrics Changes - Xcel Energy's residential electric bills in Colorado are the lowest in the country, with bills growing significantly less than inflation and other common expenses since 2020 [8] - The company has been recognized for customer satisfaction, ranking in the top quartile for the Midwest region according to J.D. Power [9] Company Strategy and Development Direction - Xcel Energy plans to invest over $60 billion over the next five years to modernize the grid and expand renewable energy generation [5] - The company aims to contract 6 GW of total data center capacity by the end of 2027, doubling its previous target [17][28] - Strategic alliances with NextEra Energy and GE Vernova are expected to enhance the company's capabilities in developing renewable energy and data center projects [18][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering 6%-8% long-term earnings growth and reaffirmed 2026 EPS guidance of $4.04-$4.16 [27][28] - The company is focused on addressing affordability issues for customers while pursuing growth opportunities in renewable energy and data centers [56][59] Other Important Information - Xcel Energy has made significant progress in settling wildfire claims, with 222 of 287 claims resolved and a low-end estimated liability of $430 million [26] - The company initiated 15 economic development projects in 2025, projected to create over $7 billion in capital investment and nearly 1,400 jobs [20] Q&A Session Summary Question: Upcoming filings in Colorado and large tariff filing - Management indicated plans to file a large load tariff in Colorado early in Q2, aiming to bring forward large loads within that framework [32] Question: $10 billion CapEx pipeline and data center growth - The $10 billion CapEx pipeline does not fully account for significant data center growth, indicating potential upside [34][36] Question: Sales growth from data centers - Management expects significant sales growth opportunities from the increased data center capacity, particularly in the later part of the decade [41][42] Question: Smokehouse Creek claims and settlements - Progress has been made in settling claims, with over 320 claims settled and a focus on resolving remaining claims [44] Question: Partnership with NextEra and time-to-market advantages - The partnership aims to enhance speed and execution certainty in developing data center projects [50][53] Question: Impact of elections on rate cases - Management noted that affordability will be a critical issue in upcoming elections, particularly in Colorado and Minnesota [54][56]

Financial Data and Key Metrics Changes - Xcel Energy reported ongoing earnings of $3.80 per share for 2025, an increase from $3.50 per share in 2024, marking the 21st consecutive year of meeting or exceeding ongoing earnings guidance [22][27] - GAAP earnings for 2025 were $3.42 per share, impacted by a $300 million charge related to the Marshall Wildfire settlement [4] - Full-year weather-adjusted electric sales increased by 2.2%, with expectations for a 3% increase in 2026 [23] Business Line Data and Key Metrics Changes - The company invested nearly $12 billion in 2025, the largest one-year total, focusing on modernizing and expanding the grid [9] - Significant projects included the conversion of the Harrington coal plant to natural gas and the completion of the Rocky Mountain solar project [10] - O&M expenses increased by $190 million in 2025, primarily due to wildfire mitigation costs and higher maintenance costs [23] Market Data and Key Metrics Changes - Xcel Energy's residential electric customers in Colorado have the lowest share of wallet among all 50 states, with average electric bills growing significantly less than inflation since 2020 [7][8] - The company ranked fourth lowest in O&M expenses per megawatt hour among peer utility companies [8] Company Strategy and Development Direction - Xcel Energy plans to invest over $60 billion over the next five years to modernize and expand its infrastructure, focusing on sustainability and reliability [5] - The company aims to contract 6 GW of total data center capacity by the end of 2027, with a goal of 3 GW by the end of 2026 [17][28] - Strategic alliances with NextEra Energy and GE Vernova are expected to enhance the company's capabilities in developing renewable energy and data center projects [18][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering 6%-8% long-term earnings growth and reaffirmed the 2026 EPS guidance of $4.04-$4.16 [26][28] - The company highlighted its commitment to affordability and customer service, with significant investments in community support and economic development projects [20][21] Other Important Information - Xcel Energy's energy assistance programs reached nearly 200,000 customers in 2025, providing $200 million in funding [9] - The company has made significant progress in settling wildfire claims, with 222 of 287 claims resolved [26] Q&A Session Summary Question: Upcoming filings in Colorado for the JTS and large tariff filing - Management indicated that the large load tariff in Colorado is expected to be filed early in Q2, with plans to bring forward large loads within that framework [32] Question: Impact of the $10 billion CapEx pipeline - The $10 billion CapEx pipeline does not fully account for significant data center growth, indicating potential upside [34][36] Question: Sales growth expectations with new data centers - Management expects significant sales growth opportunities from the increased data center capacity, particularly in the later part of the five-year forecast [41][42] Question: Update on Smokehouse Creek claims - Progress has been made with over 320 claims settled, and management is optimistic about resolving the remaining claims [44][46] Question: Partnership with NextEra Energy - The partnership aims to enhance speed and execution in developing data center projects, leveraging both companies' strengths [50][52] Question: Impact of elections on rate cases - Management noted that affordability will be a critical issue in upcoming elections, particularly in Colorado and Minnesota [54][56]

Financial Data and Key Metrics Changes - Xcel Energy reported ongoing earnings of $3.80 per share for 2025, an increase from $3.50 per share in 2024, marking the 21st consecutive year of meeting or exceeding ongoing earnings guidance [5][20] - The company recorded a charge of $300 million or $0.38 per share in 2025 due to a settlement related to the Marshall Wildfire, resulting in GAAP earnings of $3.42 per share [3] - Full-year weather-adjusted electric sales increased by 2.2%, with expectations for a 3% increase in 2026 [22] Business Line Data and Key Metrics Changes - In 2025, Xcel Energy invested nearly $12 billion, the largest one-year total, to modernize and expand its infrastructure [7] - The company completed significant projects, including the conversion of the Harrington coal plant to natural gas and the commissioning of the Rocky Mountain solar project [8] - O&M expenses increased by $190 million in 2025, primarily due to wildfire mitigation costs and higher maintenance costs [22] Market Data and Key Metrics Changes - Xcel Energy's residential electric customers in Colorado have the lowest share of wallet among all 50 states, with average electric bills in other states ranking in the top 11 for affordability [5][6] - The company has been recognized for its customer satisfaction, ranking in the top quartile for the Midwest region according to J.D. Power [7] Company Strategy and Development Direction - Xcel Energy plans to invest over $60 billion over the next five years to modernize and expand the grid, focusing on renewable generation and advanced infrastructure [4] - The company aims to contract 6 GW of total data center capacity by the end of 2027, doubling its previous target [15][27] - A strategic alliance with GE Vernova has been established to enhance the company's portfolio in wind and natural gas generation [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering 6%-8% long-term earnings growth and reaffirmed the 2026 EPS guidance range of $4.04-$4.16 [25][27] - The company highlighted its commitment to affordability and sustainability, noting that residential electric bills have grown less than inflation since 2020 [6][20] - Management acknowledged the challenges posed by extreme weather and emphasized the importance of infrastructure investments for reliability [10][11] Other Important Information - Xcel Energy's energy assistance programs reached nearly 200,000 customers in 2025, providing $200 million in funding, the highest one-year total [7] - The company has made significant progress in settling wildfire claims, with 222 of 287 claims resolved [25] Q&A Session Summary Question: Clarification on upcoming filings in Colorado and large tariff filing - Management indicated that the large load tariff in Colorado is expected to be filed early in Q2, and it will be tied to a package of generation to serve large loads [31] Question: Impact of the $10 billion CapEx pipeline on data center-driven needs - Management confirmed that the $10 billion CapEx pipeline does not fully account for significant data center growth opportunities in Colorado [34] Question: Sales growth expectations with new data centers - Management expects significant sales growth opportunities from data centers, particularly in the later part of the five-year forecast and into the 2030s [40] Question: Update on Smokehouse Creek claims - Management reported progress in settling claims, with over 320 claims settled and only about 100 outstanding [42] Question: Details on the partnership with NextEra - Management highlighted the partnership's focus on speed and execution, aiming to enhance data center project delivery [50] Question: Regulatory process for ESAs in the Upper Midwest - Management explained that regulatory filings will align with large load tariff filings to facilitate data center contracting [96]

EARNINGS REPORT PRESENTATION 2025 YEAR END February 5, 2026 © 2026 Xcel Energy Inc. 1 SAFE HARBOR Except for the historical statements contained in this presentation, the matters discussed herein are forward-looking statements that are subject to certain risks, uncertainties and assumptions. Such forward-looking statements, including those relating to 2026 EPS guidance, long-term EPS and dividend growth rate objectives, future sales, future expenses, future tax rates, future operating performance, estimated ...