• Recent coverage highlighted PG&E’s integral role in supplying power to Microsoft’s San Jose data center, drawing investor focus to the utility’s involvement in the rapidly expanding AI infrastructure sector.

• This association has also contributed to renewed attention on PG&E as an undervalued utility stock, according to recent analyst commentary.

• We’ll examine how PG&E’s ties to the AI data center boom could influence its investment narrative and long-term prospects.

AI is about to change healthcare. These 33 stocks are working on everything from early diagnostics to drug discovery. The best part – they are all under $10b in market cap – there’s still time to get in early.

To be a shareholder in PG&E, you need to believe California’s utility sector will be rewarded for supporting the power demands of emerging industries such as AI data centers, while successfully managing ongoing wildfire risk and earning regulatory approval for critical infrastructure investments. The recent news linking PG&E to Microsoft’s San Jose data center underscores a potential long-term growth catalyst. However, it has no material impact on the most important short-term catalyst: progress towards regulatory stability and wildfire liability reforms. The biggest risk remains legislative and regulatory uncertainty around wildfire responsibility.

Among recent announcements, PG&E’s lowered full-year earnings guidance in July is most relevant for understanding current sentiment. Even as data center developments point to future load growth, earnings guidance revisions focus investor attention on regulatory, operational, and cost risks over the coming quarters.

By contrast, investors should also be aware that ongoing debates about how California allocates wildfire costs could…

Read the full narrative on PG&E (it’s free!)

PG&E’s outlook anticipates $27.6 billion in revenue and $4.0 billion in earnings by 2028. This scenario assumes a 4.1% annual revenue growth and a $1.6 billion increase in earnings from the current $2.4 billion.

Uncover how PG&E’s forecasts yield a $20.39 fair value, a 29% upside to its current price.

Five individual fair value estimates from the Simply Wall St Community range from US$6.79 to US$20.39 per share. While many see strong future demand from AI and tech growth, the risk that regulatory changes could impact cost recovery remains central to the company’s outlook, reminding you that community opinions can vary widely.