AES Stock Surges on Data Center Boom and Strong Earnings

The AES Corporation has delivered an impressive third-quarter performance for 2025, surpassing market expectations and reinforcing its full-year guidance. The power company is emerging as a significant beneficiary of digital transformation, powered by robust core operations and highly profitable data center contracts that promise substantial returns.

AES reported adjusted earnings of $0.75 per share, exceeding analyst projections by 2.74%. While quarterly revenue reached $3.35 billion, coming in slightly below forecasts, the company demonstrated remarkable strength in its adjusted EBITDA, which climbed to $830 million. This represents a significant jump from the $698 million recorded during the same period last year.

Renewable energy initiatives were primary contributors to this expansion. Looking ahead, AES reaffirmed its full-year 2025 outlook, anticipating adjusted earnings per share in the range of $2.10 to $2.26. The forecast for 2026 appears even more promising, with management projecting growth approaching 15%.

Data Center Demand Fuels Expansion

Andrés Gluski, Chief Executive Officer of AES, emphasized the accelerating demand from data center clients. Power purchase agreements with these facilities are generating attractive returns between 12% and 15%, indicating substantial potential for continued expansion.

Should investors sell immediately? Or is it worth buying AES?

To reassure its shareholder base, the corporation confirmed it has no plans to pursue equity raises through 2027. This commitment provides clarity and protects existing investors from potential share dilution.

Long-Term Growth Strategy

The company remains dedicated to its ambitious target of achieving 5-7% annual EBITDA growth through 2027. Beyond this horizon, AES anticipates an additional $400 million in EBITDA from further development of renewable energy assets and strategic data center ventures.

Trading closed at $14.13 on Friday, positioning the stock in the upper segment of its 52-week range, which spans from $9.46 to $15.51. The market responded favorably to the earnings release, pushing the share price up by 2.86%.

Investors will be closely monitoring the company's execution on its renewable energy projects and its ability to secure additional data center contracts. These initiatives represent the core growth drivers that will likely determine AES's trajectory in the coming years.