Can AES (AES) Translate Data Center Demand Into Long-Term Growth Leadership?

• The AES Corporation presented at the International Security Conference & Exposition in New York past week, with Vice President Denise Niles outlining the company’s advances in clean energy solutions, energy storage, and utility-scale renewables supporting global electricity demand.
• These developments reveal how AES’s combination of robust data center agreements and global diversification is helping it address rising energy demand from rapidly expanding digital infrastructure.
• We’ll examine how AES’s strengthened position in serving data center energy needs impacts the company’s overall investment outlook.

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AES Investment Narrative Recap

To own shares in AES today, you need to believe in the long-term momentum behind global clean energy infrastructure, especially the company's ability to secure multi-year power agreements with large data center customers. The recent showcase of AES's clean energy advances at the International Security Conference reinforces its relevance to this theme, but does not materially change the primary short-term catalyst: expanding large-scale power purchase agreements. The biggest risk remains policy and subsidy changes affecting renewables economics, which this event does not materially reduce.

One recent announcement with clear relevance is AES's disclosure of 8.2 gigawatts in signed power agreements with data centers. This directly ties into the current catalyst of meeting electricity demand growth from AI and digital infrastructure, illustrating tangible progress in a market where contract volume and execution matter for future revenue certainty.

But while the top-line story shows momentum, investors should also understand the pressure that could arise if key renewables subsidies were to shift after 2027, especially since...

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

AES' narrative projects $12.0 billion revenue and $1.7 billion earnings by 2028. This requires 0.0% yearly revenue growth and an $781 million earnings increase from $919.0 million today.

Uncover how AES' forecasts yield a $15.29 fair value, a 11% upside to its current price.

Exploring Other Perspectives

Fourteen members of the Simply Wall St Community offered fair value estimates for AES ranging from US$6.93 to US$21.95 per share. As you consider these differing perspectives, keep in mind the importance of AES's multi-year renewables pipeline and risks related to subsidies that could shape future results.

Explore 14 other fair value estimates on AES - why the stock might be worth 50% less than the current price!

Build Your Own AES 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 AES research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.
• Our free AES research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate AES' 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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