NiSource (NI) stock was up about 3% in Friday’s pre-market trading after announcing a long-term energy agreement with a subsidiary of Alphabet (GOOGL) to power a large data center in Northern Indiana. The U.S. utility company also announced an expanded agreement with Amazon (AMZN) to accelerate power supply to its sites and bring forward bill credits for residential customers. NiSource stock has risen 15% year-to-date, driven by massive demand for electricity from data centers.
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Under the agreement with NiSource’s NIPSCO Generation LLC (GenCo), service for Alphabet is expected to begin this summer. The company will supply energy by utilizing a GenCo-owned pooled portfolio of electric generation assets for large-load customers and securing market capacity purchases.
NiSource highlighted that the GenCo model will ensure that existing customers benefit from the addition of new large users through savings of about $1.25 billion, or $90 to $115 per household per year.
Meanwhile, NiSource’s extended agreement with Amazon will accelerate the energization of the latter’s sites. The company added that residents will see cost savings and site activation sooner, ensuring they can take advantage of enhanced energy services and bill credits. NiSource said the latest cost savings announced will build on the previously declared $1 billion in customer savings with Amazon.
The deals with tech giants come amid a surge in demand for energy to power data centers for AI applications.
Is NiSource Stock a Buy, Sell, or Hold?
Given AI-led demand tailwinds, Wall Street has a Strong Buy consensus rating on NiSource stock based on six Buys and two Holds. The average NI stock price target of $49.75 indicates 4.3% upside potential.
