Utilities Step Into the Spotlight as Market Opens

The utility sector, often regarded as a safe haven during periods of market uncertainty, is making waves today—and none more so than Dominion Energy, Inc. (D). As markets open, Dominion is quietly outpacing many of its peers, benefiting from a confluence of sector rotation, robust demand from hyperscale data centers, and favorable regulatory dynamics in its core operating region. This surge comes as investors look for stability amid talk of a potential summer market sell-off and rising power consumption across North America.

Key Takeaways

• Dominion Energy is up 0.60% in early trading, with shares at $54 on volume of 1,094, reflecting renewed investor interest.

• Recent analyst commentary from Seeking Alpha calls Dominion a “Strong Buy” with an $89 price target, citing structural mispricing and double-digit EBITDA growth forecasts.

• Sector-wide attention is focused on utilities as high-yield opportunities, especially for those with direct exposure to data center expansion and regulatory insulation.

• Volatility remains subdued for Dominion, providing further appeal for yield-seeking investors amid broader market uncertainty.

Dominion Energy: At the Crossroads of Power and Technology

Dominion Energy, Inc. is a leading regulated utility headquartered in Richmond, Virginia. Serving over 7 million customers across multiple states, Dominion specializes in electric and gas distribution. The company is uniquely positioned at the intersection of the energy transition and the digital revolution, thanks to its outsized exposure to the Northern Virginia data center corridor—widely considered the world’s largest.

Recent trading data shows Dominion shares opening at $54, up from a previous close of $53.77, representing a 0.60% gain. While this may appear modest, it is notable in the traditionally stable utility sector, especially during a session when many investors are seeking refuge from higher-volatility names.

Performance Snapshot: Outpacing Peers Amid Rotation

Dominion’s Early Session Metrics

This solid start to the day comes on the back of mixed sessions in broader markets, with Dominion showing resilience compared to its sector peers and the S&P 500 at large.

Recent Historical Context

While recent Zacks research noted a slight dip last session (“Dominion Energy (D) closed at $54.73 in the latest trading session, marking a -1.41% move from the prior day”), today’s rebound aligns with a positive uptrend building since late spring. The stock’s relative outperformance is being driven by a series of catalysts unique to Dominion’s business model and market positioning.

Analyst and Market Sentiment: "Strong Buy" Calls and Price Target Upgrades

A flood of new analyst research has cast Dominion in a favorable light. Notably, a June 17th Seeking Alpha report issued a "Strong Buy" rating and an aggressive $89 price target—a nearly 65% premium to current levels. The bullish thesis centers on Dominion’s unique exposure to surging digital infrastructure demand and a $50 billion capital expenditure cycle that is largely recoverable through regulated rate mechanisms.

“We rate Dominion Energy a ‘Strong Buy’ with an $89 price target, citing structural mispricing and double-digit EBITDA growth from hyperscale data center demand. D’s unique exposure to Northern Virginia’s data center boom and rider-recoverable $50bn capex cycle provides unmatched earnings visibility and regulatory insulation. Consensus underestimates the company’s forward earnings power; our models show 14.5%/12.2% EBITDA growth in FY25E/FY26E, driven by contracted digital infrastructure loads.”
— Seeking Alpha, June 17, 2025

This note is reflective of a broader trend: as utilities pivot to support the electrification demands of data centers and AI-driven workloads, Dominion’s regulatory environment and capital allocation strategy stand out from the pack.

Market Context: Utilities as Defensive Growth—And Why Dominion Leads

Big Power for Big Data

Dominion’s crown jewel is its near-monopoly access to the world’s largest concentration of hyperscale data centers in Northern Virginia. With AI and cloud service providers signing long-term contracts for reliable, scalable power, Dominion is not just a traditional utility—it is increasingly a critical digital infrastructure partner. This dynamic is fueling expectations for sustained demand growth, which, when paired with regulatory recovery mechanisms, provides a rare combination of upside growth and downside protection for shareholders.

Regulatory Insulation and Capital Recovery

One of the most compelling aspects of Dominion’s story is its ability to recover a vast portion of its capital expenditures through rate riders—a feature that dampens risk and ensures earnings visibility. As highlighted in the Seeking Alpha report, this allows Dominion to undertake massive infrastructure upgrades without exposing itself to the same degree of regulatory or market risk faced by less diversified peers.

Defensive Rotation Picks Up Steam

A June 8th piece from 24/7 Wall Street argued for buying high-yield utilities on the cusp of a "summer market sell-off," spotlighting Dominion among others:

“Buy these high-yield utility stocks as power demand soars.”
— 24/7 Wall Street, June 8, 2025

With investors increasingly nervous about rich equity valuations and looming macro risks, defensive sectors like utilities are seeing renewed inflows. Dominion’s relatively high yield, stable cash flows, and growth prospects set it apart within this migration.

What’s Next? Key Themes for Investors

Earnings Visibility and Growth Potential

With a projected 12–14% EBITDA growth rate through 2026, Dominion is positioned to deliver on both income and growth mandates. The company’s forward price-to-earnings and EV/EBITDA multiples remain below historical averages, suggesting there is still room for multiple expansion if growth materializes as expected.

Key Risks: Regulatory and Execution

No utility is immune to regulatory risk, but Dominion’s proven ability to work within state and federal frameworks—combined with its critical role in supporting data infrastructure—may help mitigate some of these threats. Still, investors should watch for updates on capex approvals, potential cost overruns, and the evolving competitive landscape for utility-scale power in the mid-Atlantic.

Catalysts on the Horizon

• Q2 earnings call (date TBA): Guidance updates could further clarify long-term capex and growth trajectory.

• State-level regulatory decisions: Any news on rate cases or infrastructure approvals will be key.

• Sector-wide M&A activity: Utilities remain potential targets for consolidation, particularly those with digital infrastructure exposure.

Closing Thoughts: Dominion Energy’s Role in a Changing Utility Landscape

Dominion Energy’s outperformance in today’s session is not simply a function of defensive rotation; it is a reflection of the company’s unique positioning at the intersection of digital infrastructure growth and regulatory stability. With analyst upgrades, robust earnings forecasts, and a growing role as an enabler of the data economy, Dominion offers a compelling mix of yield, growth, and downside protection. Investors should keep a close eye on this utility leader as the sector continues to evolve—and as market volatility keeps defensive yield plays in sharp focus.