Strong performance and high growth expected... US energy infrastructure stocks soar
Summary
- It was reported that US energy infrastructure stocks surged, driven by strong corporate earnings and the announcement of the government's AI policy.
- Major energy infrastructure companies, including GE Vernova, disclosed positive financial indicators such as improved earnings, increased free cash flow targets, and the acquisition of large power plants.
- There is an expectation for improved profitability for power infrastructure firms due to anticipated increases in electricity prices and AI-related policy support.
Energy infrastructure-related stocks showed strong performance in the US stock market. As companies reported robust earnings and the government unveiled its Action Plan for artificial intelligence (AI) policy, buying momentum increased.
On the 23rd (local time), GE Vernova, an energy equipment manufacturer, surged by 14.58% in the US stock market. Oklo, a small modular reactor (SMR) developer (9.21%), Talen Energy, a power infrastructure company (8.18%), and Nano Nuclear Energy, a reactor development firm (7.80%), also recorded significant gains. Over the past month, GE Vernova (25.84%), Oklo (21.52%), and Talen Energy (16.34%) have risen sharply. The development of AI is expected to increase electricity demand, making improvements in these companies' earnings highly likely.
On this day, GE Vernova announced that its second-quarter earnings per share (EPS) reached $1.86, surpassing the market estimate of $1.50. The company also raised this year's free cash flow (FCF) target from the previous $2–2.5 billion to up to $3.5 billion. Talen Energy recently announced the acquisition of two large power plants for $3.5 billion (about ₩4.7 trillion) to meet data center electricity demand.
The US release of the Action Plan, a cornerstone of its AI policy, is also stimulating investor sentiment. President Donald Trump emphasized, “AI is a competition that the US must win,” adding, “We need to nurture this baby (AI) rather than block it with politics or foolish regulations.” On the same day, President Trump signed three executive orders including swift permits for AI data centers and export support for US AI models.
The expectation of rising electricity rates going forward is also seen as positive. According to PJM Interconnection, the largest power grid operator in the US, the capacity auction for 2026–2027 saw a price cap per megawatt reach $329.17. This is a sharp 22% jump from $269.92 for 2025–2026. Power producers or infrastructure firms may enjoy indirect benefits from higher selling prices.
Reporter Jo Ara rrang123@hankyung.com
Korea Economic Daily
hankyung@bloomingbit.ioThe Korea Economic Daily Global is a digital media where latest news on Korean companies, industries, and financial markets.
