Energy utility NiSource (NI) continues to meaningfully expand its data-center power business, most recently announcing a major deal with Microsoft (MSFT) on Oct. 16. Meanwhile, the Indiana-based utility expects its earnings per share, excluding certain items, to grow at a robust compound annual growth rate (CAGR) of 9% to 10% between 2026 and 2033, while the company — which serves roughly 3.3 million natural gas customers and 500,000 electricity customers across six states — may be able to expand its data-center business to other states. Finally, two banks have been bullish on NI stock recently, while shares are changing hands at a relatively low valuation despite a significant dividend yield.
As a consequence of all of these points, value investors, growth-at-a-reasonable-price investors, and conservative investors may want to consider buying NI stock. Let's take a closer look.
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www.barchart.com NiSource Has a Promising Data-Center Power Business
On Oct. 16, NiSource announced that it had reached a 20-year electricity supply deal with Microsoft (MSFT). Under the deal, the utility will provide the tech giant with about 1,100 megawatts of power beginning in 2028.
This agreement comes after NiSource signed a contract to power Alphabet's (GOOGL) “large‑scale data center in northern Indiana” in April. Moreover, in November 2025, the company disclosed that it would provide as much as 3 gigawatts of power to Amazon's (AMZN) data centers for 15 years. In April 2026, the utility noted that it had expanded its agreement with Amazon.
All of the large, upcoming data centers that NiSource intends to power will be built in Indiana. However, since the utility firm also distributes natural gas in states like Ohio, Virginia, and Kentucky, it may eventually be able to power data centers in other states as well.
What Do Analysts Think of NI Stock?
After meeting with management in September, BMO Capital trimmed its price target for NI stock to $45 from $49 but kept an “Outperform” rating. More recently, however, analysts raised their target from $45 to $48 per share. BMO Capital has become more confident in the value of NiSource's business, while low visibility for data centers in a number of states is reportedly incentivizing firms to build facilities in places like Indiana.
For its part, in July, Keybanc also named NiSource as one of two companies positioned to exploit strengthening electricity demand from data centers. NiSource has reportedly been able to reduce worries around the burden on ratepayers as well as political opposition to data centers.
On the valuation front, NI stock currently trades at a forward price-to-earnings (P/E) ratio of 20.8 times. Because the company expects its adjusted EPS to expand at a CAGR of 9% to 10% between 2026 and 2033, that valuation actually appears relatively low and attractive. Plus, NI stock has a meaningful forward dividend yield of 2.81%.
Overall, NI stock has a consensus “Moderate Buy” rating on Wall Street based on 17 analysts with coverage.
On the date of publication, Larry Ramer had a position in: AMZN , AMZU . All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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