So, you know how everyone's talking about the AI boom and how it's going to need a ton of electricity? Well, here's a concrete example of what that looks like in the real world. AES Corp. (AES) shares climbed on Tuesday after the utility giant locked in a 20-year clean energy deal with Google (GOOG), a subsidiary of Alphabet Inc. (GOOGL). It's a deepening footprint in the fast-growing, power-hungry data center market, and it's the kind of long-term contract that makes utility investors smile.
The landmark agreements are to support a planned Google data center in Wilbarger County, Texas. These aren't just any contracts; they're 20-year Power Purchase Agreements (PPAs), which basically means Google is committing to buy clean power from AES for the next two decades to run its servers. This expands an existing partnership between the companies as demand for digital infrastructure—the kind that runs AI models and cloud services—absolutely skyrockets.
These deals highlight AES's role as a leading clean energy provider to big corporate customers in the U.S. In fact, BloombergNEF's Corporate Energy Market Outlook ranked AES as a top provider to corporate customers over the last five years.
"AES is recognized as a world leader in providing energy solutions to technology companies," said Andrés Gluski, AES President and CEO. "To-date, AES has signed agreements for nearly 12 GW of energy with data center customers, 9 GW of these are PPAs directly with hyperscalers."
That's a staggering number. For context, 12 gigawatts is enough to power millions of homes. The fact that 9 GW of it is directly with "hyperscalers"—the industry term for the massive tech companies like Google, Amazon, and Microsoft that operate cloud platforms—shows where a huge chunk of future electricity demand is coming from.
From Google's side, this is about making its massive energy consumption more sustainable and less disruptive. "In partnership with AES, we are bringing new clean generation online directly alongside the data center to minimize local grid impact and protect energy affordability," stated Amanda Peterson Corio, Google’s Global Head of Data Center Energy. She called the Wilbarger County site a long-term investment in the region.
The companies say the agreements aim to enhance grid reliability, affordability, and sustainability while supporting rural landowners and expanding job opportunities in Texas. It's a strategic move that boosts AES's infrastructure capabilities and fits neatly into the narrative of utilities building out the power grid for the AI era.
What the Charts Are Saying
Investors have been liking this story for a while. Over the past 12 months, AES has seen its stock price jump 52.24%. On a technical basis, things look pretty bullish. The stock is currently trading 3.4% above its 20-day simple moving average and 12.9% above its 100-day SMA. The Relative Strength Index (RSI) sits at 61.16, which suggests the stock is neither overbought nor oversold—there might be room to run. The Moving Average Convergence Divergence (MACD) indicator also points to bullish momentum, with the MACD line above the signal line.
Earnings on the Horizon
All eyes will now turn to the company's upcoming earnings report, scheduled for February 26, 2026. Here’s what analysts are expecting:
- EPS Estimate: 61 cents (Up from 54 cents year-over-year)
- Revenue Estimate: $3.23 billion (Up from $2.96 billion year-over-year)
- Valuation: A P/E ratio of 10.7x, which some see as a value opportunity.
The analyst consensus on the stock is a Buy rating, with an average price target of $17.93. However, the recent analyst actions show a bit of a mixed picture:
- Barclays: Downgraded to Equal-Weight on February 4, but maintained a $15.00 price target.
- Jefferies: Maintained a Hold rating on February 4, but raised its price target to $16.00.
- Argus Research: Was more bullish, upgrading the stock to Buy with an $18.00 target back on December 5, 2025.
