Ceres Power shares soar on China data centre power deal

Ceres Power soared by over 23% after its British developer of clean energy technology announced a deal with the largest Chinese shareholder for powering data centres. The deal gave a boost to a stock that was already boosted by the growing interest of investors in energy companies who support the AI infrastructure building out, a theme which has led to sharp gains throughout the sector.

Analysts often compare Ceres to Bloom Energy, a U.S. listed company whose stock has risen by 480% in the past year due to a deal made with Oracle. Ceres' focus was historically on Asian markets. Weichai Power, a Chinese company, will manufacture Ceres solid oxide fuel cell and stacks in China for stationary power systems, targeting AI data centers, commercial buildings, and industrial applications.

Ceres did not disclose the financial terms, but said that revenues from this license are expected to be recognized next year. The 2025 guidance remains unchanged.

Luca Moro said that the rise was largely due to investors' enthusiasm for themes relating to "powering AI", with a search for stocks linked to this trend.

He warned caution, pointing out that the deal hadn't changed fundamentals for the company.

He said that the deal was a good step forward, but it is yet to be seen if it will generate enough cash flow to justify the current valuations.

Ceres Power's market capitalization has increased by almost 3000% in the last two months. By 1112 GMT the FTSE 250 was up 21% to 380 pence. Goldman Sachs added the stock this week to its European convictions list with a target of 480 pence, saying that the company is well positioned to profit from the next wave in data-centre expansion. UBS believes Ceres will break even one year earlier in 2026. (Reporting from Danilo Masoni, Milan; additional reporting from Samuel Indyk, London; editing by Amanda Cooper).

(source: Reuters)