Artificial intelligence (AI) is reshaping entire industries, but few investors realize the scale of energy needed to drive this transformation. The data center solutions market is projected to skyrocket from $448.95 billion in 2025 to $1,105.28 billion in 2030, a staggering compound annual growth rate of 19.7%. This increase is driven by the need for facilities capable of handling AI workloads, including training and inference for deep learning models.
However, this rapid expansion comes at a cost. American power grids are now under pressure from power-hungry data centers. Policymakers are even considering emergency measures to take these facilities off the grids during power outages.
While the tech giants dominate the headlines, a lesser-known natural gas producer stands to gain as much, if not more, from this structural shift. Expand Energy Corporation (EXE) has quietly increased its natural gas production. The company has also returned $585 million to shareholders in the first half of 2025 alone. If you’re looking for a backdoor strategy for AI-driven energy demand, could this overlooked energy stock be your best bet for 2026? Let’s dive into EXE.
Oklahoma-based Expand Energy powers U.S. data centers in major shale basins and produces and markets natural gas, oil and NGLs at scale. The dividend framework is simple. It offers an annual forward dividend of $2.30 for a yield of 2.20%, and the most recent dividend of $1.465 was paid on August 14.
The current EXE stock price is $101.09 and the year-to-date (YTD) performance shows a gain of 1.94% and a 52-week performance of 19.02%.
www.barchart.com
The company has approximately $24.71 billion in equity value and $29.997 billion in enterprise value, trading at 27.27x ttm P/E versus the industry’s forward P/E of 12.43x and 18.89x versus 12.98x, reflecting a premium for growth, scale and cash conversion relative to its peers.
The latest quarter reported by Expand Energy, released July 29, is a useful lens on that setup. This showed net cash provided by operating activities of $1.322 billion, underscoring the cash-generative nature of the portfolio at the current strip price. It detailed net income of $968 million, or $4.02 per diluted share, with adjusted net income of $265 million, or $1.10 per share, clarifying underlying profitability after non-cash and temporary items.
This highlighted adjusted EBITDAX of $1,176 million, which underpins operational strength before interest, taxes, DD&A and exploration costs. He highlighted the highest average footage drilled per day across all three business units, indicating execution gains in cycle times and well productivity. That targeted about $425 million of incremental free cash flow by 2025 compared to previous plans, primarily due to better performance, creating more room for capital returns and deleveraging.
EXE increased its 2025 net debt payout to $1 billion, reinforcing balance sheet improvement through cash generation rather than asset sales. Expand Energy returned $585 million to shareholders in the first half of 2025 through the base dividend, a variable dividend and share buybacks, demonstrating a commitment to distributing excess cash while funding growth. This supports the thesis that a natural gas supplier with scale, efficiency and disciplined capital allocation can be a direct beneficiary of growing AI energy demand and investor appetite for cash-backed growth.
Expand Energy operated an average of 11 rigs during the second quarter, drilling 49 wells and bringing 59 online, with resulting net production of approximately 7.2 billion cubic feet equivalent (Bcfe) per day.
This production, 92% natural gas, aligns closely with the growing footprint of AI-driven data demand in the U.S. Expand Energy’s strategy keeps it squarely in the conversation as analysts look for suppliers with scale, reliability and production that matches the rise in electricity consumption of next-generation technology.
On September 30, the company finalized a $3.5 billion unsecured revolving credit agreement with JP Morgan Chase Bank (JPM) acting as administrative agent. The agreement provides Expand Energy with significant financial flexibility for the coming years.
There is an option to expand the facility by another $1 billion, which would raise the total borrowing capacity to $4.5 billion. The facility expires five years from the effective date, meaning Expand Energy secures a low-cost liquidity window while executing medium-term capital return and growth plans.
This fund is structured so that the company can access financing for working capital, continued drilling and infrastructure improvements. The covenants require prudent debt management, a debt-to-capitalization ratio that does not exceed 65%, and the freedom to prepay and borrow again without penalties except standard default fees.
Estimates for Expand Energy’s next earnings release, scheduled for October 28, show analysts expecting $0.91 for the third quarter, $1.67 for the fourth quarter, $5.53 for the full year 2025 and $9.01 for the full year 2026. These figures mark dramatic improvements compared to the prior year’s results of $0.16, $0.55, $1.41 and $5.53, respectively.
The forecast growth rate is 468.75% for Q3, 203.64% for Q4, 292.20% for FY2025, and 62.93% for FY2026, highlighting what could be a period of accelerated profitability for EXE. This acceleration reflects anticipated operational efficiencies and increased demand tied to AI data center expansion in the United States, a central theme to EXE’s growth thesis.
Those rising estimates are combined with a more efficient capital plan and greater capture of synergies, strengthening the future narrative. The company reduced full-year 2025 drilling and completion capital spending guidance by approximately $100 million to boost approximately $2.9 billion in total capital expenditures, preserving free cash flow without undermining growth.
Analyst sentiment could not be more optimistic. All 28 respondents give EXE stock a consensus rating of “Strong Buy,” with an average price target of $130.85. This implies a calculated upside of approximately 29% from the current price.
So is this the best way to play with AI in 2026? For investors who want real cash flow behind the issue, Expand Energy seems like a clear yes. With accelerated earnings forecasts, disciplined capital expenditures and strong analyst conviction, the setup is tilted positively in the upcoming release. Shares will most likely rally to the low to mid-$120s within six to 12 months, with pullbacks bought on strong fundamentals.
www.barchart.com
As of the date of publication, Ebube Jones had no (directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are for informational purposes only. This article was originally published on Barchart.com
