Morgan Stanley predicts 50% surge in renewable stocks due to tech demand

Morgan Stanley has highlighted the significant role of AES Corporation in the renewable energy sector, particularly in meeting the growing demand from data centers driven by the tech industry. The company is recognized for its reliability, having never canceled a project, and is well-positioned with a renewable energy pipeline of 66 gigawatts, primarily located in areas experiencing data center growth. Analysts project a stock price target of $25 for AES, indicating a potential 50% increase from its recent closing price. The demand for renewable energy is expected to rise as tech companies increasingly seek carbon-free energy sources. AES has established strong relationships with suppliers and has the necessary equipment to meet demand through 2026. This positions the company favorably in a market where tech customers are prioritizing sustainability and decarbonization commitments. Despite potential political risks surrounding the U.S. presidential election and the Inflation Reduction Act, AES is seen as resilient. Analysts believe that even if the Act were repealed, AES could adjust its pricing to maintain returns, as the demand from the tech sector remains robust and less sensitive to price fluctuations. Overall, the outlook for renewable stocks is optimistic, with Morgan Stanley predicting a 50% surge driven by the tech industry's demand for sustainable energy solutions. AES Corporation is poised to be a key player in this transition, capitalizing on the increasing need for renewable energy in data center operations.