On Tuesday, the largest component of the second-best performing sector for 2025 reports results. One would think this could generate big headlines but think again. When people think of top places to invest in a bull market, they don’t usually think utilities. Well, these aren’t your grandparents’ utilities. The need to power and build data centers to support rapid AI expansion as well as a supportive regulatory framework makes this a high growth and transformative area to invest. The Utility Sector ETF (XLU) has already broken out to new highs as it is up 23% year-to-date trailing only technology. The largest holding in that ETF — making up 12.3% — is poised to break out of a major base and has a great risk/reward set-up on top of an enticing storyline. That stock is NextEra (NEE ) , the company formerly known as Florida Power and Light. Last quarter shares dropped 6.1%, snapping a 7-quarter winning streak post earnings. Shares have been able to bounce back since then and are now poised to take another leg higher — possibly much higher. One reason the utility sector has been on fire recently is thanks to prospects of nuclear energy. It just so happens that NEE has existing nuclear facilities in Wisconsin and New Hampshire, and they obtained 20-year extensions for two units in Florida. Lastly, they are hoping to restart a shuttered center in Iowa that was closed in 2020. The company filed a licensing request change with the Nuclear Regulatory Commission in early 2025. Let’s see if they address their continued prospects when they report. The Trade Technically, the stock looks poised to go. Yes, it has had a tremendous run over the last few weeks, and we have seen a retracement after registering an overbought RSI reading. However, the recent pullback is proving to be healthy as old resistance is becoming support. This gives traders a good reference point to manage risk. Use a stop-loss just under the $80 level and re-evaluate the trade if it fails. What looks truly positive is this rounded bottom base from which shares have broken above. This gives investors a potential upside target of $104 and a great risk/reward set-up favoring being long the stock into Tuesday’s numbers. Now for confirmation of this trend, let’s look at this on a longer-term chart. Here on the 5-year weekly chart we see a major consolidation between ~$62 and ~$83. We broke below it in late 2023 and early 2024 only to recapture those levels again and resume its long-range neutral pattern. Now as we head into quarterly results, the stock has closed at its highest weekly level ever. It has broken out of this range and now look to get confirmation of the breakout with a follow through this week. When examining this stock on multiple time frames it confirms that we are at a key threshold and this breakout could take us much higher. Going into earnings price is leading and may be telling us something. We will find out shortly. DISCLOSURES: Woods owns shares of NextEra. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
