Key Highlights

● Xcel Energy reported adjusted third-quarter Earnings of $1.52 a share against a $1.37 consensus.

● The Utility introduced an initial 2027 outlook of $4.48 to $4.62 a share.

● Revenue of $4.17 billion lagged the $4.26 billion estimate, but earnings drew the focus.

● Utilities gained as money rotated out of mega-cap technology after Alphabet's steep drop.

Xcel Energy (NASDAQ:XEL) topped profit forecasts and offered a first look at 2027, rising on a day when investors fled mega-cap tech for the safety of utilities.

Profit beats, Revenue lags

Xcel Energy, the utility that supplies electricity and Natural Gas across parts of the Midwest and the West, reported third-quarter results on October 29 that leaned firmly in investors' favor. Adjusted earnings came in at $1.52 a share, well ahead of the $1.37 consensus.

Revenue was a touch softer, at $4.17 billion against an estimated $4.26 billion, according to market data. For utilities, though, investors tend to focus on Earnings Per Share and long-term guidance rather than the top line, which can swing with fuel costs that are largely passed through to customers.

The stock rose solidly on the day, making it one of the more notable gainers in a Nasdaq-100 that otherwise slid to 29,402.51.

A first look at 2027

Xcel narrowed its 2026 earnings guidance to a range of $4.10 to $4.16 a share. More importantly, it introduced an initial 2027 outlook of $4.48 to $4.62 a share, giving investors visibility into another year of earnings growth.

That kind of predictability is exactly what utility investors pay for. Regulated utilities earn returns set by state commissions on the power plants, wires and pipelines they build, so a clear multi-year earnings path signals that capital projects are on track.

The defensive trade in action

Xcel's gain was part of a much bigger story. Utilities rose strongly as a sector on Thursday, according to market commentary, as money rotated out of mega-cap technology. Alphabet (NASDAQ:GOOGL) suffered its worst day since its 2004 IPO, wiping out about $500 billion in market value, and the Nasdaq Composite tumbled 365.13 points to 26,184.72.

Utilities, consumer staples, real estate and health care all climbed. Eight of the eleven S&P 500 sectors finished higher, and more than 400 index members advanced even as the S&P 500 slipped 23.59 points to 7,720.39.

"Money is rotating within the market rather than leaving it," one market strategist said, as quoted by market data.

A helping hand from bonds

The Bond Market also gave utilities a lift. The 10-year Treasury Yield slipped back from the multi-decade highs it touched earlier in October, even after Thursday's hot Inflation data. Utilities are often treated as bond substitutes because of their steady dividends, so falling yields tend to make them more attractive.

That bond rally came despite a hawkish economic backdrop. Third-quarter GDP grew faster than forecast, and September PCE inflation ran hot. The Federal Reserve held rates steady on Wednesday, though two officials dissented in favor of a hike, and traders continued to lean toward a December increase.

Power Demand in the AI era

Utilities have also drawn attention as electricity demand rises with the buildout of data centers. Vertiv (NYSE:VRT) chief executive Giordano Albertazzi said on Wednesday that the industry is "in the middle of the largest infrastructure buildout." Xcel's longer-term guidance gives investors a way to gauge how that demand translates into earnings over time.

Peer WEC Energy Group (NYSE:WEC) also posted strong quarterly results, beating earnings estimates and raising its 2026 outlook, adding to the sense of momentum across the group.

What to watch

The biggest variable for Xcel is the path of interest rates. Friday's third-quarter Employment Cost Index could shift expectations for the Fed's December 8 to 9 meeting, and a hike could push yields higher again, which would test the appeal of utility stocks.

Investors will also watch whether Xcel can stay within its narrowed 2026 range and build toward the $4.48 to $4.62 target for 2027. Dominion Energy (NYSE:D) reports on Friday, providing another read on the sector.