AES Company is positioned to guide the deployment of renewable power to help demand from knowledge facilities, with the corporate seen as a key accomplice for know-how corporations increasing synthetic intelligence, based on Morgan Stanley. “AES stays effectively positioned to serve demand for renewable power knowledge facilities the place it nonetheless sees sturdy curiosity and upward stress on returns,” David Arcaro and a staff of shopper analysts mentioned in a Friday observe. Arcaro has a $25 inventory worth goal for AES, suggesting a virtually 50% upside from Thursday’s shut of $16.94 per share. AES is seen as a key accomplice for the know-how sector as the corporate delivers on time and on price range, by no means canceling a venture, the analyst wrote. It has a renewable pipeline of 66 gigawatts, the bulk within the US, with 75% situated in knowledge heart progress areas. The case stays sturdy that knowledge heart load progress will probably be largely met by renewables and batteries, though fuel technology may even be wanted, Arcaro mentioned. AES discovered that know-how prospects want power sources that don’t emit carbon dioxide emissions. “The corporate has no scarcity of buyer curiosity in renewables,” he mentioned. AES additionally has a robust relationship with suppliers, Arcaro mentioned. The corporate has all the mandatory gear in place for 2024, most of 2025 and a part of 2026, he added. Furthermore, AES will not be uncovered to a lot threat from the end result of the US presidential election in November. Whereas repeal of the Inflation Discount Act is unlikely, even when the regulation is repealed, AES may go on greater prices to prospects by way of greater energy settlement costs, leaving returns largely unchanged, the analyst mentioned. “Demand additionally must be protected to some extent given the numerous demand for AI and decarbonisation commitments on this trade, making this buyer base comparatively much less worth delicate,” Arcaro mentioned.
Morgan Stanley sees 50% rise in renewable power shares on knowledge heart demand from tech trade
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