PG&E Corporation (PCG): A Bull Case Theory

We came across a bullish thesis on PG&E Corporation on Aklan Investment Research’s Substack. In this article, we will summarize the bulls’ thesis on PCG. PG&E Corporation's share was trading at $16.28 as of February 5th. PCG’s trailing and forward P/E were 13.64 and 10.02 respectively according to Yahoo Finance.

PG&E Corporation (PCG) is the holding company for Pacific Gas & Electric Company, a regulated electric and gas utility serving approximately 16 million customers across Northern and Central California. The company’s operations are primarily focused on electric transmission and distribution and gas distribution, with earnings largely determined by rates approved by the California Public Utilities Commission (CPUC). As a regulated utility, PCG is designed to recover its costs and earn a set return on capital investments, making regulatory outcomes the key driver of long-term value.

The stock continues to trade at a discount largely due to lingering concerns around wildfire liability, stemming from PG&E’s 2019 bankruptcy after its equipment was linked to several catastrophic wildfires in 2017–2018. Despite significant structural changes since then, investor perception remains anchored to wildfire risk, which in turn pressures regulators and legislators to impose stringent safety standards and elevated ongoing costs. These concerns have overshadowed the company’s operational improvements and long-term earnings power.

However, PG&E has made substantial progress in mitigating wildfire risk, which represents a critical catalyst for rerating. The company is aggressively undergrounding high-risk power lines, with roughly 1,000 miles completed as of the third quarter of 2025, alongside deploying thousands of sensors, insulated conductors, and reinforced poles. At the same time, secular growth in data center demand driven by AI is emerging as a powerful tailwind. PG&E expects up to 10 GW of incremental data center load over the next decade, which would meaningfully improve grid utilization, support higher returns on invested capital, and stimulate broader economic activity within its service territory.

An additional catalyst lies in the upcoming 2027–2030 General Rate Case decision, expected in early 2027. PG&E is requesting a relatively modest revenue increase with clear cost justification tied to wildfire mitigation and grid upgrades, increasing the likelihood of a constructive regulatory outcome. Taken together, improving safety metrics, structurally rising power demand, and potential regulatory clarity position PG&E Corporation as an undervalued regulated utility with a path toward earnings normalization and multiple expansion as wildfire fears gradually recede.

Previously, we covered a bullish thesis on PG&E Corporation (PCG) by Acid Investments in February 2025, which highlighted the market’s overreaction to wildfire fears, lack of direct liability exposure, and attractive valuation supported by superior EPS growth. PCG’s stock price has appreciated by approximately 2.51% since our coverage. Aklan Investment Research shares a similar view but emphasizes wildfire mitigation progress, data center demand growth, and upcoming CPUC rate decisions.

PG&E Corporation is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 79 hedge fund portfolios held PCG at the end of the third quarter which was 77 in the previous quarter. While we acknowledge the risk and potential of PCG as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than PCG and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.