Demand From Data Center & Strategic Acquisitions Fuel NRG's Growth

NRG Energy, Inc. NRG continues to benefit from a diverse customer base and the ability to retain customers, which enhances its financial performance. The company is set to benefit from its LS Power deal.

However, this Zacks Rank #3 (Hold) company faces risks related to disruptions in its fuel delivery system.

Factors Acting in Favor of NRG

NRG Energy has made notable strides in its transformation into an integrated power company by prioritizing customer-centric strategies. Its strong performance has been driven in part by organic growth initiatives. As of Dec. 31, 2024, NRG served a diverse customer base, with no single customer accounting for more than 10% of its total revenues. Thanks to its high-quality services, the company has maintained strong customer retention, thereby reducing its reliance on any single client.

In May 2025, NRG announced plans to acquire a premier power portfolio from LS Power. This acquisition doubles NRG’s generation capacity with the addition of 18 natural gas-fired facilities totaling nearly 13 gigawatts (GW). It transforms NRG’s generation fleet and broadens its customized product offerings.

The company is starting to unlock data center and other upside opportunities. NRG has fully dedicated engineering, construction, and offtake structuring teams to execute its tailored data center strategy. In August 2025, NRG entered into 295 megawatts of premium, long-term retail agreements to power data centers constructed on two NRG-owned sites in Texas. Initial powering is expected in the second half of 2026, with the facilities fully online by 2030. There is potential to expand capacity up to 1 GW across additional sites.

Challenges Faced by NRG

NRG Energy’s costs, results of operations, financial condition and cash flows could be adversely impacted by the disruption of its fuel supplies as it relies on natural gas, coal and oil to fuel the majority of its power generation facilities. These facilities are subject to risks of power production disruptions or curtailments if fuel is not available on time due to counterparty nonperformance or disruptions in the fuel delivery system.

NRG Energy is subject to extensive regulations at both the federal and state levels. This could adversely impact the company’s operations and its ability to recover costs from customers in a timely manner, thereby affecting its rate of return.

NRG’s Stock Price Performance

In the past six months, shares of the company have risen 67.5% compared with the industry’s 5.4% growth. 

Stocks to Consider

Some better-ranked stocks from the same industry are TransAlta TAC, sporting Zacks Rank #1 (Strong Buy), and Fortis FTS and Algonquin Power & Utilities AQN, both carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for TAC’s 2025 earnings per share (EPS) is pinned at 8 cents, indicating a decline of 81.4% year over year. The Zacks Consensus Estimate for 2025 sales is pinned at $2 billion, indicating a decline of 4% year over year. 

FTS’ long-term (three to five years) earnings growth rate is 5.13%. The Zacks Consensus Estimate for 2025 EPS indicates an increase of 5% year over year. 

The Zacks Consensus Estimate for AQN’s 2025 EPS indicates an increase of 3.3% year over year. AQN delivered an average earnings surprise of 4.9% for the trailing four quarters. 

 

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This article originally published on Zacks Investment Research (zacks.com).

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