Shares of Entergy Corporation advanced further on Wednesday, trading around $113.74 after closing at a new 52-week high of $112.36 the previous day. This marks the utility stock's seventh consecutive session of gains, fueled by bullish analyst commentary and a landmark agreement with technology giant Meta Platforms.
Analysts Raise Targets Following Strategic Deal
Mizuho analyst Anthony Crowdell increased his price target for Entergy to $120 from $112, maintaining an Outperform rating. In a note issued this week, Crowdell highlighted that the initial 5.2-gigawatt phase of the Meta project alone has the potential to add approximately 85 cents per share to earnings after 2030. Similarly, UBS analyst William Appicelli reaffirmed a Buy rating and a $120 price target, citing the Meta partnership and Entergy's robust regulated capital expenditure pipeline as key drivers for a premium valuation.
UBS noted that Entergy's asset portfolio and favorable regulatory positioning could enable it to outpace much of the utility sector in future growth. This optimism aligns with the company's broader strategic direction. In February, Entergy added $2 billion to its projected capital spending, raising its total planned investment for 2026-2029 to $43 billion.
Details of the Meta Partnership
Last week, Entergy announced a revised agreement with Meta for a planned $10 billion hyperscale data center in Richland Parish, Louisiana. Under the terms, Meta will cover the entire cost of service for the project. This arrangement is projected to generate about $2 billion in savings for Entergy's customers over a 20-year period, on top of a previously announced $650 million benefit.
The expansive project encompasses seven new natural gas-fired power plants with a combined capacity exceeding 5.2 gigawatts, alongside major high-voltage transmission upgrades, battery storage systems, and enhancements to nuclear facilities. Phillip May, President and CEO of Entergy Louisiana, described the initiative as "targeted investments that strengthen reliability." Meta's Vice President for Data Centers, Rachel Peterson, emphasized that the structure ensures "other consumers aren't paying our costs."
Market Context and AI Power Demand
Entergy's rally reflects a growing investor focus on utilities positioned to capitalize on the surge in electricity demand from artificial intelligence and data centers, while being shielded from direct pressure on residential consumer rates. The Meta deal is viewed as a concrete example of a major technology company directly funding the energy infrastructure required for its expansion.
This trend is not isolated to Entergy. The industry is witnessing a wave of similar partnerships as Big Tech's power appetite reshapes utility investment strategies. For instance, Constellation Energy is working to restart the Three Mile Island nuclear facility to supply Microsoft's data centers, and Google has partnered with NextEra Energy to bring a retired plant in Iowa back online.
Regulatory Hurdles and Financial Outlook
The agreement is not yet finalized. Entergy's proposal in Louisiana awaits regulatory approval, with a decision anticipated in the fourth quarter of 2026. Some critics have raised concerns that the arrangement could still pose risks to customers if Meta's power demand falls short of projections, though Entergy has stated that Meta remains contractually obligated for its costs regardless.
Entergy's management plans to provide detailed financial implications of the Meta expansion when the company reports its first-quarter earnings on April 29. Investors are keenly awaiting this update as the stock trades near record highs following its sustained upward move.
The company also disclosed that its existing portfolio of data-center agreements is expected to deliver roughly $5 billion in fixed-cost contributions over the lifetimes of the contracts. This steady revenue stream is seen as a crucial factor in mitigating pressure on residential electricity rates.
