Shares of Nvidia (NVDA) slipped Monday as investors paused following the stock’s recent rally and turned their attention to the chipmaker’s earnings report later this week.

The stock fell roughly 1.5% to around $222.97 in morning trading after dropping 4.4% on Friday, interrupting a powerful multi-session advance that had pushed shares to record highs.

The broader market also weakened following a strong week for equities, with investors continuing to monitor oil prices, Treasury yields, and geopolitical tensions in the Middle East.

The S&P 500 declined 0.2%, while the Nasdaq Composite fell 0.5%.

The Dow Jones Industrial Average added 91 points.

Earnings now the key catalyst

Nvidia’s earnings report on Wednesday has become the next major catalyst for both the company and the broader artificial intelligence trade.

Wall Street remains heavily focused on whether Nvidia can maintain its dominance in AI processors as competition expands across the industry.

A growing portion of investor attention has shifted toward inference, which many companies increasingly view as the next major battleground in AI infrastructure.

Some rivals, including Cerebras Systems, are attempting to challenge Nvidia by promoting alternative architectures optimized for inference workloads.

At the same time, enthusiasm around central processing units, or CPUs, has increased as companies look for lower-cost ways to run AI applications.

KeyBanc analyst John Vinh expects Nvidia to further strengthen its position by unveiling stand-alone CPU server racks during the upcoming Computex conference in Taiwan in early June.

Wall Street expects another beat-and-raise quarter

Analysts broadly expect Nvidia to once again deliver results above expectations.

Morgan Stanley analyst Joseph Moore said he expects Nvidia to follow its familiar “beat-and-raise” pattern.

Moore projects the company could exceed revenue expectations by roughly $3 billion and guide future sales approximately $4 billion above current consensus forecasts.

Morgan Stanley recently raised its April-quarter revenue estimate for Nvidia from $78.25 billion to $79.26 billion and lifted earnings-per-share estimates from $1.69 to $1.72.

The bank also significantly increased longer-term projections.

Its fiscal 2028 revenue estimate jumped from roughly $452 billion to nearly $587 billion, while earnings-per-share forecasts rose from $10.14 to $13.11.

According to Visible Alpha consensus estimates, Nvidia is expected to report approximately $78.5 billion in fiscal first-quarter 2026 revenue.

The company’s data-center business remains the primary growth engine, with consensus forecasts projecting around $72.8 billion in quarterly data-center revenue.

That figure has surged from estimates near $53.8 billion less than a year ago, highlighting the extraordinary pace of AI infrastructure demand.

AI spending boom still supports Nvidia

Despite increasing competition and short-term volatility, Nvidia remains the central beneficiary of the global AI infrastructure buildout.

Major technology companies, including Microsoft, Meta, Amazon, and Alphabet, have all sharply increased capital expenditure forecasts tied to artificial intelligence.

That wave of spending continues to reinforce expectations that Nvidia’s GPUs will remain the backbone of AI training and inference systems globally.

Investors will now closely watch Nvidia’s guidance around production capacity, gross margins, inference demand, and potential opportunities in China.

The China outlook remains especially important after repeated US export restrictions limited Nvidia’s ability to sell its most advanced chips into the market.

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HIVE Digital (HIVE) ripped higher on Monday after announcing a plan to set up a C$3.5 billion ($2.55 billion) artificial intelligence (AI) gigafactory in Toronto.

This mega-facility will draw roughly 320 megawatts of utility power – and is designed to host more than 100,000 specialized, high-performance GPUs upon completion.

At its intraday peak on Monday, HIVE stock was seen trading at a year-to-date high of about $3.82.

Significance of the AI gigafactory for HIVE stock

HIVE shares rallied this morning primarily because the AI gigafactory announcement validates its pivot from a cyclical Bitcoin miner into a long-duration artificial intelligence infrastructure play.

A multi-billion facility signals institutional-scale ambition and positions the firm to capture surging demand for GPU compute – a major bottleneck in the AI economy.

The planned 320 MW power draw and capacity for 100,000 high-performance GPUs give investors a clearer line of sight into the future; utility-like cash flows instead of volatile mining rewards.

In short, the Toronto revelation substantiates management’s strategy of repurposing the company’s energy footprint toward higher-margin AI workloads – a significant pivot that expands the addressable market, improves revenue visibility, and compresses the risk premium on the stock.

That said, HIVE Digital is still down nearly 50% versus its 52-week high.

Why caution is warranted in playing HIVE shares

While evidently positive on paper, there’s reason to take today’s price action with a pinch of salt.   

Investors seem to be pricing in immediate success for a project that won’t even “begin” operations until the second half of 2027.

This 18-month construction timeline leaves an immense amount of execution risk on the table.

Plus, much of the HIVE stock rally on May 18 is tied to “retail enthusiasm” after former OpenAI superalignment researcher Leopold Aschenbrenner – who now runs the multi-billion-dollar hedge fund Situational Awareness – explicitly named the AI infrastructure firm as one of his key holdings.

Therefore, once the initial hype cools down, HIVE Digital will likely retreat, especially since it’s trading at a rather stretched 13x price-to-cash-flow at the time of writing.

HIVE Digital remains a high-risk bet in 2026

Investors should also note that funding a C$3.5 billion project for a company worth roughly $720 million, with no history of sustainable profitability, is a tall task.   

To finance this massive capital expenditure, HIVE Digital will almost certainly have to tap into debt or significantly dilute shareholders – neither of which screams long-term hold.

Moreover, the firm’s dual-engine model keeps it exposed to fluctuating digital asset prices, power costs, and intense competition, further making today’s gains look rather unsustainable.

On the flip side, however, Wall Street remains bullish on HIVE shares for the remainder of 2026.

The consensus rating sits at “strong buy”, with the mean price objective of $5.5 indicating potential upside of another 60% from here.

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Europe’s soaring electricity prices are threatening its ambitions to compete with the US and China in artificial intelligence, as power-hungry data centers face mounting costs and investors increasingly look elsewhere, according to a CNBC report. 

Experts warn that without cheaper energy, Europe risks falling far behind in the AI race. 

Europe has set its sights on becoming a leader in AI, but the region’s energy costs are undermining those ambitions. 

Europe’s AI challenge  

According to the International Energy Agency (IEA), electricity prices for energy-intensive industries in Europe are, on average, double those in the US and 50% higher than in China and India. 

This disparity is particularly damaging for AI, since data centers—essential to training and running large models—consume vast amounts of power.  

Michael Brown, global investment strategist at Franklin Templeton, told CNBC that geography is now a decisive factor in AI investment. 

“If I were making the next $7 billion data center, it would be in the US or China,” he said, highlighting Europe’s disadvantage.  

Data centers and energy strain  

Data centers already account for 2% of global electricity consumption, up from 1.7% in 2024, according to the International Data Center Authority (IDCA). 

In some countries, consumption is nearing critical thresholds: the US is at 6%, the UK at 5.8%, and Singapore at nearly 20%.

Once data centers exceed 5% of national electricity use, political and community pushback typically intensifies.  

Olivier Darmouni, associate professor at HEC Paris, said the AI boom is a “wake-up call” for Europe to treat energy as a matter of economic sovereignty.

He warned that without fixing the energy system, Europe cannot achieve affordability, competitiveness, or technological leadership.  

Winners and losers  

Not all of Europe is equally affected.

Germany and the UK are struggling with high electricity costs—averaging $88.97 per MW in Germany and $111.65 in the UK, compared with $28 in the US.

This has already led to setbacks: OpenAI paused its Stargate project in the UK, citing energy costs and regulatory hurdles.  

By contrast, France and the Nordics are emerging as winners. France benefits from its nuclear energy leadership, while Norway, Sweden, and Denmark enjoy low electricity prices and diverse energy mixes. 

Nvidia’s principal programme manager, Vladimir Prodanovic, noted that “nearly every big AI company is in Norway,” with Microsoft investing billions in Nordic data centers, including a $6.2 billion deal in Norway and expansions in Sweden and Denmark.  

Risks of falling behind  

Chris Seiple of Wood Mackenzie identified three reasons Europe lags in data center development: high energy costs, geographic disadvantages, and slower infrastructure buildout.

He warned that these factors make Europe “a little bit more challenging” for AI investment compared to the US and China.  

Darmouni added that Europe’s scale is far behind: “The scale of what we’re seeing in the US compared to Europe is like 1 to 100.” 

Matching US capacity would require massive new investment, but soaring energy costs make that unlikely.  

Outlook  

Europe’s AI ambitions are colliding with its energy reality. Without cheaper electricity and faster infrastructure development, the region risks losing ground to the US and China. 

Analysts say integration across national energy grids and new power sources is essential if Europe wants to compete.  

Europe’s future in AI may hinge not on algorithms or talent, but on whether it can secure affordable electricity to power the data centers that drive the technology.  

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Shares of Intel (INTC) fell 2% on Monday, extending the stock’s losing streak to a fifth consecutive session after a sharp pullback late last week. 

However, the stock recovered and was trading down 0.18% at the time of writing.

The decline followed a powerful rally that pushed Intel stock up roughly 170% in 2026 as investors aggressively positioned around companies tied to AI infrastructure spending.

Despite this, multiple Wall Street analysts raised their price targets on the company, arguing that investors may still be underestimating Intel’s long-term earnings potential in the expanding AI-driven semiconductor market.

Analysts raise Intel targets on AI-driven CPU demand

Analysts continued highlighting growing demand for central processing units, or CPUs, as one of the key drivers behind Intel’s strong performance this year.

Citi analyst Atif Malik raised his price target on Intel to $130 from $95 while maintaining a Buy rating on the stock.

In a research note, Malik introduced a model estimating that the total addressable market for CPUs could expand 35% annually to reach approximately $132 billion by 2030, driven largely by increasing demand for processors powering AI agents and large-scale data centers.

Benchmark Equity Research analyst Cody Acree also turned more bullish on Intel, lifting his price target to $140 from $105.

Acree argued that investors continue underestimating Intel’s “earnings power” for fiscal 2027 and 2028 as AI-related computing demand accelerates.

The broader semiconductor sector has rallied sharply in recent months as AI hyperscalers continue investing heavily in data-center infrastructure.

Earlier this year, Nvidia stated that “CPUs are becoming the bottleneck” for artificial intelligence systems, reinforcing optimism surrounding Intel’s core processor business.

Intel CEO Lip-Bu Tan also emphasized the company’s growing AI positioning during the company’s April earnings call.

“The CPU is reinserting itself as the indispensable foundation of the AI era,” Tan said, adding that demand for Intel’s data-center CPUs currently exceeds supply.

Trump comments spotlight Intel’s strategic role

Investor attention also turned toward comments from President Donald Trump regarding Intel’s strategic importance in the global semiconductor industry.

In an interview published Monday, Trump said he regretted not securing a larger government ownership stake in Intel during the landmark 2025 agreement that gave the US government a 9.9% holding in the company.

Describing his exchange with Tan, Trump said he asked for “10% ownership for free” of Intel, adding that Tan responded, “you have a deal,” before Trump joked: “S—, I should have asked for more.”

Trump also argued that Intel “would be the biggest company in the world right now” if tariffs had prevented chip production from shifting overseas.

“Intel would have all that business now, and there would be no Taiwan,” Trump said, referring to Taiwan Semiconductor Manufacturing Company.

Intel’s stock has surged more than 300% since the US government converted billions of dollars in CHIPS Act-related grants and awards into equity last year.

The company has also recently benefited from reports that Apple and Intel reached a preliminary agreement involving chip manufacturing, while Elon Musk previously indicated plans to use Intel chips in Tesla’s Terafab project.

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Macy’s Inc (M) is in focus on Monday morning after Berkshire Hathaway’s latest filing disclosed a new position worth roughly $55 million in the iconic retail chain.

The strategic buy-in from one of the world’s most revered conglomerates has boosted interest in M, with the company’s share price up nearly 4% at the time of writing.

Berkshire’s revelation arrives despite a challenging macroeconomic backdrop, with Macy’s stock currently down some 17% versus the start of this year.

Why Berkshire Hathaway invested in Macy’s stock

Berkshire’s filing is monumental, given that it marks the firm’s first direct venture into the department store sector since 1966.

Its former chief executive and legendary investor, Warren Buffett, remained cautious on brick-and-mortar retail for decades, making this sudden accumulation under new CEO Greg Abel even more interesting for market participants.

What attracted the conglomerate was M shares’ deep value proposition and solid fundamentals.

Trading at a rather compressed 8x forward earnings, with an extensive real estate portfolio and some $23 billion in sales (trailing twelve months), Macy’s represents a quintessential Buffett value play.

Berkshire may also have been compelled due to Macy’s disciplined cost controls and its rock-solid shareholder returns; its dividend yield currently sits at a super lucrative 4.03%.

Significance of Berkshire’s stake for M shares

The Berkshire announcement injects immense institutional credibility into M’s ongoing corporate turnaround – lighting a bullish path for the stock through the remainder of 2026.

The department store giant is currently executing its ambitious Bold New Chapter strategy, focused on closing about 150 underperforming locations, while modernizing and investing in its 350-strong “go-forward” locations.

These store closures are expected to result in a near 4% year-on-year decline in Macy’s upcoming Q1 earnings scheduled for early June, in line with management’s expectations of pressure on the top-line due to these store closures.

For investors, what’s more important is that the early pilot store transformations have already shown big promise, capturing strong comparable sales.  

All in all, the sudden endorsement from Berkshire offers a powerful stabilizing force, which could accelerate both retail and institutional flows into Macy’s shares as the year unfolds.  

How to play Macy’s at current levels

Macy’s high expected dividend yield of more than 4% provides an attractive income cushion while the retail business transforms.

Plus, its valuation multiple also signals that much of the existential retail risk is already baked into the stock price.

However, investors should note that Berkshire’s entry is relatively small compared to its total cash pile, acting more as a calculated option on a successful turnaround rather than a definitive bet on high growth.

While Macy’s presents a compelling risk-to-reward ratio at current levels, market participants must weigh the persistent macroeconomic headwinds against the structural tailwinds of the “Bold New Chapter” strategy before fully committing.

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Shares of Tesla (TSLA) fell around 2% early Monday as investors reacted negatively to the company’s surprise decision to raise prices on some of its top-selling vehicles.

The stock dropped to roughly $410.50 after already sliding 4.75% on Friday, extending a pullback that interrupted Tesla’s recent rally tied to optimism around autonomous driving and China expansion.

The broader market was also weaker as investors monitored oil prices, Treasury yields, and developments surrounding tensions in the Middle East.

The S&P 500 fell 0.2%, while the Nasdaq Composite declined 0.5%. The Dow Jones Industrial Average rose 0.2%.

Tesla raises Model Y prices

Tesla shocked investors by increasing prices for higher-end versions of its best-selling Model Y crossover.

The company raised prices by between $500 and $1,000 for premium all-wheel-drive configurations, pushing some versions closer to the $50,000 level.

Base Model Y variants remained unchanged, with starting prices around $40,000 to $42,000.

The move appears aimed at improving Tesla’s profitability after automotive gross margins rebounded to roughly 21% during the first quarter, up sharply from approximately 14% a year earlier.

Investors, however, worried the timing could backfire as the broader electric vehicle market weakens following the expiration of the US federal $7,500 EV tax credit.

Total US electric vehicle sales reportedly fell 27% in the first quarter, forcing many automakers to cut prices aggressively to maintain demand.

Average EV transaction prices have also fallen as competition intensifies across the sector.

Despite the broader slowdown, the Model Y remains the top-selling electric vehicle in the United States and accounts for roughly 36% of all EV sales nationally.

FSD optimism still supporting shares

Even with Monday’s decline, Tesla shares remain well above levels seen earlier this year.

The stock recently traded above $450 and has stayed consistently above the $400 level for several sessions — something it had not maintained since early March.

Much of the recent rally was fueled by optimism surrounding potential approval for Tesla’s Full Self-Driving software in China.

Chief Executive Elon Musk traveled to China last week as part of US President Donald Trump’s delegation.

Investors had hoped the summit with Chinese President Xi Jinping would produce meaningful progress toward FSD approval, though no major agreements emerged from the meetings.

Tesla currently charges US customers $99 per month for FSD subscriptions and reported approximately 1.3 million subscribers at the end of the first quarter.

A launch in China would significantly expand Tesla’s software revenue opportunity in one of its most important global markets.

Investors increasingly view Tesla less as a traditional automaker and more as an artificial intelligence and autonomous mobility company.

Musk’s on Robotaxi expansion

Chief Executive Elon Musk on Monday said Tesla expects to expand fully self-driving vehicles nationwide across the United States later this year, following the initial launch in Texas.

Tesla currently operates robotaxi services in Austin, Dallas, San Francisco, and Houston.

However, the rollout has faced criticism over long wait times, vehicle availability, and inconvenient drop-off locations.

Musk has continued making aggressive long-term predictions around autonomous driving, recently stating that within five to ten years, roughly 90% of all miles driven could be handled by AI-powered vehicles.

At the same time, autonomous driving technology remains under regulatory scrutiny.

Both Tesla and Waymo recently issued recalls tied to safety-related software concerns, including rearview camera delays and risks involving flooded-road navigation.

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Shares of Netflix (NFLX) gained roughly 2% on Monday, bucking broader market weakness after Bank of America reiterated its bullish outlook on the streaming giant and maintained a $125 price target on the stock.

The move came even as Netflix shares remain down roughly 25% over the past year, with investors continuing to debate whether the company’s advertising and live sports strategies can reignite stronger long-term growth.

At current levels near $89, Bank of America’s target implies significant upside potential of 40% over the next 12 months.

Jessica Reif Ehrlich of Bank of America reaffirmed her Buy rating on Netflix on May 18, arguing that the company’s expanding advertising business remains one of the strongest long-term growth opportunities in the streaming industry.

Advertising business becomes key growth pillar

Much of Wall Street’s optimism surrounding Netflix has increasingly centered on the company’s ad-supported subscription tier.

According to Ehrlich, Netflix’s advertising platform has expanded rapidly over the past year, with the ad-supported tier now reaching more than 250 million monthly viewers compared with approximately 94 million a year earlier.

The company generated roughly $1.5 billion in advertising revenue during 2025, and management expects that figure to approximately double to around $3 billion in 2026.

Netflix has continued investing heavily in advertising technology, pricing tools, and additional ad formats as it competes more aggressively for global digital advertising budgets.

Analysts noted that the advertising business provides Netflix with a potentially powerful second growth engine beyond traditional subscription revenue, particularly as the global streaming market becomes more competitive and subscriber growth moderates across the industry.

Despite recent stock volatility, Wall Street analysts largely continue viewing Netflix as one of the strongest-positioned media companies in the evolving streaming and digital advertising landscape.

NFL partnership strengthens live-event ambitions

Netflix has also continued expanding into live sports programming as part of its broader strategy to increase engagement and attract advertisers.

The company recently extended its partnership with the National Football League through 2029 and secured rights to three additional games.

The agreement includes the NFL’s first Thanksgiving Eve game as well as an international opener in Australia, helping Netflix broaden its global audience reach while strengthening its advertising inventory.

Rather than attempting to fully replicate traditional sports broadcasting models, Netflix appears focused on selectively adding high-profile live events that can drive subscriber engagement and premium advertising demand.

Analysts said the strategy complements the company’s broader push into advertising by creating opportunities for large-scale live audiences that advertisers increasingly value.

Netflix is also expected to spend roughly $20 billion on content during 2026 as it continues expanding its entertainment ecosystem globally.

Wall Street remains broadly bullish

Although Netflix shares have struggled to regain momentum in 2026, analysts have largely maintained positive ratings on the stock.

Recent Wall Street price targets issued this month have ranged from approximately $105 to $128, with the broader analyst consensus still sitting at “Strong Buy.”

Analysts also continue pointing to Netflix’s relatively small share of total global television viewing as evidence of additional long-term growth potential.

According to Ehrlich, Netflix currently represents only about 5% of global TV viewing and serves roughly 330 million subscription households compared with a potential addressable market estimated near 800 million households worldwide.

The combination of advertising growth, live sports expansion, global subscriber scale, and continued earnings momentum has helped sustain bullish sentiment around Netflix even as broader technology and media stocks remain volatile.

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Strategy (previously known as Microstrategy) MSTR, the bitcoin treasury company led by executive chairman Michael Saylor, disclosed Monday that it acquired an additional 24,869 bitcoin for approximately $2.01 billion between May 11 and May 17.

According to an 8-K filing with the Securities and Exchange Commission, the company purchased the bitcoin at an average price of roughly $80,985 per coin.

The latest acquisition brings Strategy’s total holdings to approximately 843,738 BTC, worth about $65.3 billion based on current prices.

The company said it has spent roughly $63.9 billion acquiring bitcoin at an average purchase price of approximately $75,700 per bitcoin, including fees and expenses.

Strategy’s holdings now represent more than 4% of bitcoin’s total 21 million supply cap, underscoring the company’s increasingly aggressive treasury strategy centered on the cryptocurrency.

Stock sales fuel latest bitcoin acquisition

The purchases were financed primarily through Strategy’s ongoing at-the-market stock sale programs.

The company raised approximately $2.03 billion through a combination of common stock and preferred stock offerings over a six-day period ending May 17.

Strategy sold around 19.95 million shares through its STRC preferred stock program, generating roughly $1.95 billion in net proceeds.

It also sold approximately 430,344 shares of its Class A common stock, MSTR, raising an additional $83.7 million.

The company immediately deployed approximately $2.01 billion of the proceeds into bitcoin purchases.

Strategy continues to maintain significant fundraising capacity through its multi-tiered at-the-market (ATM) programs.

According to company disclosures, approximately $51.5 billion remains available across multiple equity issuance programs, including roughly $26.3 billion tied to MSTR and $17.5 billion connected to STRC.

The STRC preferred stock has increasingly become the company’s primary financing tool for bitcoin purchases.

The variable-rate cumulative preferred stock currently offers an annualized dividend yield of roughly 11.5%.

Strategy recently proposed shifting STRC dividend payments from monthly to twice-monthly distributions, stating the move could “lead to reduced reinvestment lag, enhanced liquidity, market efficiency, and increased price stability.”

Saylor signals purchase ahead of disclosure

Ahead of Monday’s filing, Saylor again hinted at the acquisition through social media.

On Sunday, he posted an update tied to Strategy’s bitcoin acquisition tracker alongside the phrase “Big dot energy,” which investors interpreted as signaling another substantial purchase announcement.

Analysts at K33 recently argued that strong demand for STRC may be contributing to recurring mid-month bitcoin buying pressure as Strategy continues issuing shares and using proceeds to accumulate additional BTC ahead of dividend-related timelines.

The company has also continued reshaping its balance sheet alongside its bitcoin acquisition strategy.

On Friday, Strategy agreed to repurchase approximately $1.5 billion face value of its zero-coupon 2029 convertible notes for about $1.38 billion, retiring the debt at roughly 92 cents on the dollar.

The filing listed bitcoin sales as one of several potential funding sources for the transaction, a notable disclosure given Saylor’s previously stated “net accumulator” policy regarding bitcoin holdings.

Bitcoin treasury model expands across corporate sector

Strategy remains the dominant player among public companies adopting bitcoin treasury strategies, though the model has expanded significantly across corporate markets.

According to Bitcoin Treasuries data, approximately 196 public companies have adopted some form of bitcoin acquisition model, with 84 companies currently maintaining active treasury strategies.

Other major corporate holders include Coinbase, MARA Holdings, Riot Platforms, and Hut 8.

Despite the continued institutional adoption trend, many bitcoin treasury-related stocks remain well below their 2025 highs as investor enthusiasm has cooled alongside broader cryptocurrency market volatility.

Strategy shares declined approximately 6.3% last week, closing Friday at around $177.42, though the stock remains up roughly 12.89% year to date.

Bitcoin itself recently fell below $78,000 amid renewed inflation concerns and geopolitical tensions surrounding Iran and global energy markets.

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Shares of Dominion Energy surged in trading on Monday after utility giant NextEra Energy announced plans to acquire the company in a $66.8 billion deal that would create the largest electric utility operator in the United States.

Dominion shares (D) rose about 10% following the announcement, while NextEra Energy stock slipped more than 3.6% as investors weighed the scale of the transaction and the integration challenges ahead.

The deal comes as electricity providers across the United States race to expand infrastructure and generation capacity to meet an unprecedented rise in power demand driven by artificial intelligence data centers.

The companies said the transaction would be structured primarily as a stock deal and would combine two of the country’s largest power operators into a massive East Coast utility with operations spanning Florida, Virginia, and the Carolinas.

The merger will require approval from a wide range of state and federal regulators.

AI boom reshapes utility industry

The proposed combination reflects how the rapid buildout of AI infrastructure is reshaping the US utility sector and reviving electricity demand growth after decades of stagnation.

Power availability has become a crucial factor for technology companies rushing to build new data centers, many of which require enormous and continuous electricity supplies.

New AI-focused data centers can consume as much electricity as around 1,000 Walmart stores operating simultaneously, according to industry estimates.

Beyond AI, utilities are also grappling with rising demand from electric vehicles, manufacturing facilities, and expanding residential consumption.

The industry is expected to invest tens of billions of dollars in new power plants, battery storage systems, transmission networks, and grid upgrades over the coming years.

Florida-based NextEra currently has a market value of nearly $200 billion, while Virginia-based Dominion is valued at roughly $50 billion.

NextEra owns Florida Power & Light, the largest electric utility in the United States, and is one of the country’s biggest developers of renewable energy, battery storage, and transmission infrastructure.

While traditionally viewed as a clean-energy leader, NextEra has increasingly embraced natural gas as part of its strategy to meet surging electricity demand.

Chief Executive John Ketchum has advocated an “all of the above” approach to power generation and has argued that data center developers should also contribute dedicated energy capacity to support their projects.

Dominion’s data center exposure draws attention

Dominion Energy has emerged as one of the key beneficiaries of the AI infrastructure boom because of its dominant presence in Virginia, home to the world’s largest concentration of data centers, often referred to as “data center alley.”

The company operates regulated utilities in Virginia and the Carolinas and owns gas-fired power plants that sell electricity into wholesale markets.

Dominion currently has nearly 51 gigawatts of contracted data-center capacity and counts major technology firms, including Alphabet, Amazon, Microsoft, Meta, Equinix, CoreWeave, and CyrusOne among its customers.

Dominion Chief Executive Robert Blue said at the CERAWeek conference in Houston earlier this year that the company had connected more than 450 data centers in Virginia since it began tracking the sector.

Last year, data centers accounted for 28% of Dominion’s electricity sales in the state, highlighting the growing importance of AI infrastructure to utility earnings.

Blue said the industry had not witnessed such strong demand growth since the years following World War II.

Utilities pivot to infrastructure expansion

The transaction also highlights the strategic importance of scale as utilities prepare for a long-term investment cycle tied to artificial intelligence and electrification.

NextEra has already been expanding partnerships linked to AI infrastructure growth.

In December, the company announced a collaboration with Google Cloud to build large-scale data center campuses paired with power generation facilities across the United States.

Last year, NextEra and Google also announced plans to restart a nuclear reactor in Iowa that had been shut since 2020 after sustaining wind damage.

The Dominion acquisition would significantly strengthen NextEra’s position in one of the fastest-growing electricity demand corridors in the country, while giving the combined company a major foothold in supplying power to the rapidly expanding AI economy.

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When Henry Hazlitt wrote in Economics In One Lesson that “Economics is haunted by more fallacies than any other study known to man” he knew what he was talking about. Economic fallacies abound — and are even popular. What’s worse, economic illiteracy seems to only increase. In part, this is due to economists trying too hard to be scientific and help policymakers engineer the economy.

Many consider the well-known words of Lord Kelvin obvious, that “when you can measure what you are speaking about, and express it in numbers, you know something about it; but when you cannot measure it, when you cannot express it in numbers, your knowledge is of a meagre and unsatisfactory kind.” That sentiment has been taken to heart by many in the sciences, both natural and social, and also in economics. 

After all, without the ability and use of mathematics and statistical data analysis, science would not be able to contribute much knowledge at all. Yet there are limits to the usefulness of measures, as Goodhart’s Law suggests: “When a measure becomes a target, it ceases to be a good measure.”

It is actually even worse in economics, where the use of measures can arguably be a cause of widespread economic illiteracy.

An example of this is the frequent references to inflation in the business press. Experts eagerly note how anything from weakening demand to supply shocks and trade policy will change the inflation rate. The same can be claimed about economic growth, which apparently can not only be generated by economic policy but where government spending “causes” or is essential for economic growth — regardless of how the money is spent.

Both are examples of how economic understanding suffers from what Charles Goodhart recognizes. Inflation is real and so is economic growth, but both are economic concepts with real meaning. In order to investigate them, economists invented statistical constructs — the CPI and GDP, respectively — to simulate approximate measures of the concepts. But both are imperfect. 

Inflation used to be understood by economists as the general rise in prices due to the dilution of money. Hence Milton Friedman’s claim that “inflation is always and everywhere a monetary phenomenon.” Prices always fluctuate, but that is just the market’s price mechanism. Inflation was distinct: the effect on prices overall from meddling with money (basically, counterfeiting).

Economic growth explains the increase in the wealth of a nation, which economists understand as the productive capacity. When this capacity increases, the economy can more easily satisfy consumers’ wants. We are richer as a result. 

In both cases, the measures are fundamentally flawed but provide some insight into change over time. The CPI captures some of the general rise in prices, but looks at the outcome without recognizing the cause. This has misled people, experts and laymen alike, to believe that increasing prices means inflation. But rising prices can have many causes, often entirely normal upstream effects. A sad result of attempting to measure the outcome is that, for example, a war that affects production “creates inflation.” But higher oil prices are not inflation. This is something that no reasonable economist would have even considered, but now it is presented as a supposed “insight.” 

Similarly, the GDP gives an indication of an economy’s productive capacity, but also includes government spending on supposed public goods that are heavily subsidized or provided “for free.” In other words, it appears as if government spending, regardless of what the money is spent on, “creates growth” because it increases GDP. Such spending does not need to actually increase productive capacity — it can even harm productivity — yet still be interpreted as “economic growth” because of its effect on statistics.

Both are examples of how Goodhart’s Law applies — and in fact undermines our economic understanding. This is readily recognizable in how supposed experts claim that price ceilings, or any government effort to control prices (usually by prohibiting high prices), “fights inflation” or that government waste (by virtue of spending) “contributes to economic growth.” They focus entirely on the official statistic, which was originally a poor measurement of a well-understood economic concept, and anything that affects this statistic. But the understanding of the concept is all but lost. And, in fact, they run with it and in the process invent new economic fallacies in order to come across as insightful.

Economics thus remains haunted by fallacies. Rather than dispelling the fallacies or informing policy, some economic indicators and their analyses generate economic illiteracy.

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