How Energy Transfer’s (ET) Data Center Gas Deals Are Shaping Its Investment Story

• In recent weeks, Energy Transfer announced new long-term deals to supply natural gas to major AI data center projects, including agreements with Oracle and Fermi, supported by billions in planned capital investments in natural gas infrastructure.
• This move aligns the company with surging demand for reliable energy from technology firms, reinforcing its role in powering digital infrastructure and data center growth.
• We’ll explore how Energy Transfer’s focus on data center energy supply could influence its investment narrative and future outlook.

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Energy Transfer Investment Narrative Recap

To be a shareholder in Energy Transfer, you need to believe in the long-term demand for natural gas, the resilience of midstream energy infrastructure, and the company’s ability to secure fee-based contracts in growth sectors like data centers and LNG exports. The recent data center supply deals target a core short-term catalyst, increasing contracted volumes, but do not materially change the biggest near-term risk, which remains the potential for cost overruns and regulatory delays in Energy Transfer’s large, multi-year infrastructure projects.

Among recent announcements, the 20-year gas transportation agreement with Entergy Louisiana highlights Energy Transfer’s focus on expanding long-duration, contracted revenues in addition to the new AI and data center partnerships. This contract, supporting project stability and long-term cash flows, is particularly relevant as investors weigh the impact of major new investment commitments amid ongoing project execution and permitting risks.

However, investors should be aware that, despite these growth catalysts, the possibility of cost overruns or permitting delays in the company’s multi-billion-dollar projects remains a risk that...

Read the full narrative on Energy Transfer (it's free!)

Energy Transfer's narrative projects $99.8 billion revenue and $6.7 billion earnings by 2028. This requires 7.4% yearly revenue growth and a $2.2 billion earnings increase from $4.5 billion today.

Uncover how Energy Transfer's forecasts yield a $21.87 fair value, a 33% upside to its current price.

Exploring Other Perspectives

Simply Wall St Community members provided 21 distinct fair value estimates for Energy Transfer, ranging from US$15.48 to US$43.41 per share. While views differ widely, many investors are watching how long-term contract wins could help offset near-term project execution risks, explore several viewpoints before forming your own opinion.

Explore 21 other fair value estimates on Energy Transfer - why the stock might be worth over 2x more than the current price!

Build Your Own Energy Transfer Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Energy Transfer research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Energy Transfer research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Energy Transfer's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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