What the era of massive energy deals means for the bull market

NextEra-Dominion deal is the largest in a series of energy deals this year

This column is for Callaway Climate Insights subscribers only, but it’s OK to share once in a while. Was it shared with you? Please subscribe.

The Midway II solar project in Southern California, in which Dominion Energy owns a majority interest.

The $67 billion merger deal this morning that would unite NextEra Energy with Dominion Energy to form the third largest U.S. power company is more than the biggest energy deal of the AI data center era. It’s the latest in a spate of deals this year that signals the investor stampede into AI might be getting long in the tooth.

Florida-based NextEra NEE 0.00%↑ stunned Wall Street with a brash, all-stock deal to buy Virginia’s Dominion D 0.00%↑, which, among other things, would give it a utility giant located in the heart of the country’s biggest cluster of data centers. The combined company would be a leader in power generated from natural gas, energy storage and nuclear, among other sources.

But there are aspects of the deal that should give investors pause after a roaring year of gains in energy stocks amid higher prices and surging demand from big tech data centers developing the latest AI.