Nobody's Talking About This Energy Company, but It's Quietly Signing the Power Deals Feeding the AI Build-Out
Matt DiLallo, The Motley Fool
Sat, August 29, 2026 at 3:55 PM GMT+3 7 min read
When investors want to play the AI power boom, the first names that come to mind are hot stocks in emerging energy technologies, such as advanced fuel cell maker Bloom Energy (NYSE:BE) and small modular reactor developer Oklo (NYSE:OKLO). Bloom has major AI partnerships with Oracle and Brookfield, while Oklo has deals with Meta Platforms and Switch.
One company almost no one is talking about is the high-yielding clean-power producer Clearway Energy (NYSE:CWEN). That's a mistake. Its parent (Clearway Energy Group) quietly signed a nearly 1.2-gigawatt (GW) deal to build renewable power for Alphabet (NASDAQ:GOOG)(NASDAQ:GOOGL), and it's getting paid much more for the power produced at some of its legacy assets because the new power buyer is a hyperscaler with voracious energy needs.
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That's only the beginning. AI power is one of the catalysts that make Clearway among the top renewable energy stocks to buy.
Image source: Getty Images.
Clearway Energy is starting to cash in on the AI power boom
This past January, Clearway Energy Group signed three long-term power purchase agreements (PPAs) with Alphabet's Google for nearly 1.2 GW of projects to support its data centers. They represent over $2.4 billion of investment in energy infrastructure, with the first projects expected to come online in 2027 and 2028. It's a significant expansion of its existing power partnership with Google, which currently consists of a 71.5-megawatt (MW) project in West Virginia.
While Clearway Energy isn't investing directly in these assets initially, it will in the future. It has already agreed to buy Goat Mountain (a wind repowering project in Texas backed by a Google PPA) from its parent when it begins commercial operations next year. Additionally, it has identified Swan Solar and Catamount Wind (two other Google-linked projects) for potential acquisition in 2028.
However, the Google deal isn't even the biggest story here. Clearway recently signed over 600 MW of PPAs to extend the contract life of existing wind farms its repowering to 2041. Customers include two contracts with a hyperscaler and one with another commercial and industrial customer, with fixed pricing more than two times the prior contracted or merchant pricing. These deals suggest that its legacy assets are becoming much more valuable in the AI age. It has a massive recontracting opportunity as legacy PPAs expire.
A new upside opportunity is emerging
The Google-tied drop-down deals are also only a drop in the bucket. Clearway Energy Group currently owns or controls a 32 GW development pipeline, providing a long runway of drop-down investment opportunities. Clearway Energy has currently committed to or identified 3.5 GW of investment opportunities through 2028, representing about $1.3 billion. These drop-down deals enable Clearway Energy Group to recycle capital into new renewable energy development projects, including those to support AI data centers.
These two catalysts provide a clear baseline for growth over the coming years. Clearway Energy currently expects to grow its cash available for distribution CAFD) per share at the top end of its 5%-8%+ target range through 2030, with growth likely to continue within that range in 2031 and beyond.
However, a new opportunity is emerging that could enhance its post-2030 growth rate: Co-located digital infrastructure power investments. Clearway Energy Group is currently developing over 17 GW of projects across five sites to build on-site power generation capacity at data center campuses. It sees an upside opportunity forming where Clearway Energy could provide over $1 billion in capital around 2030 to support this strategy. The first project in Wyoming targets a 2029 in-service date, with full capacity (3-4 GW) in 2030.
What this means for investors
Clearway isn't your typical AI power play. Popular names like Bloom Energy are growing fast (100% revenue growth expected this year) or are more about future promise (Oklo doesn't currently generate very much revenue). That high-powered growth potential has made them very volatile -- Oklo is currently down 75% from its 52-week high, while Bloom Energy's price is more than 35% below its peak. Clearway Energy, on the other hand, has been much less volatile (down bout 20% from its recent peak) due to the stability of its long-term PPAs and high-yielding dividend (currently over 5.5%).
That dividend should grow and become more sustainable over the coming years. Clearway Energy currently expects to grow its CAFD per share from $2.12 last year to over a range of $2.90-$3.10+ by 2030. With its current annualized dividend rate of $1.90 per share, Clearway can continue to grow its dividend while progressing toward its target long-term CAFD payout ratio of less than 70%. That combination of earnings and income growth should enable Clearway Energy to generate double-digit average annual total returns.
Now, to be fair, Clearway isn't a risk-free investment. It recently lowered its 2026 CAFD outlook due to this year's strong weather patterns (El Niño), which have impacted wind energy generation in the U.S. There's also a lot riding on its ability to acquire assets from Clearway Energy Group at fair terms. However, with AI data centers driving accelerating power demand, Clearway Energy has the potential to grow at or above its long-term target range for years to come.
An AI power name you should know
Clearway Energy isn't the next Bloom Energy or Oklo. It isn't building new energy tech from the ground up. Instead, it's building on the growing legacy of clean energy backed by a portfolio of assets secured by long-term PPAs. That legacy portfolio is becoming much more valuable in the AI age. Clearway will continue to add to its portfolio by acquiring assets from its parent and third parties. That should power steady cash flow and dividend growth for investors who can cash those dividend checks while others wait for hot names like Oklo to hopefully pay off one day.
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Matt DiLallo has positions in Alphabet, Bloom Energy, Brookfield Asset Management, Clearway Energy, and Meta Platforms and has the following options: long December 2028 $650 calls on Meta Platforms, short December 2028 $660 calls on Meta Platforms, and short October 2026 $150 puts on Bloom Energy. The Motley Fool has positions in and recommends Alphabet, Bloom Energy, Brookfield Asset Management, Meta Platforms, and Oracle. The Motley Fool has a disclosure policy.
Nobody's Talking About This Energy Company, but It's Quietly Signing the Power Deals Feeding the AI Build-Out was originally published by The Motley Fool
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