Ceres Power shares soar on China data centre power deal

By Danilo Masoni

(Reuters) -Ceres Power surged over 23% on Wednesday after the British clean-energy technology developer announced a licensing deal with its largest Chinese shareholder to help power data centres.

The move added momentum to a stock already buoyed by growing investor interest in energy companies supporting the AI infrastructure buildout, a theme that has driven sharp gains across the sector.

Ceres, often compared by analysts to U.S.-listed Bloom Energy - whose shares have jumped 480% this year thanks to a deal with Oracle - has historically focused on Asian markets.

Under the agreement, Weichai Power will manufacture Ceres' solid oxide fuel cells and stacks for stationary power systems in China, targeting AI data centres, commercial buildings and industrial applications.

Financial terms were not disclosed, but Ceres said revenues from the licence were expected to be recognised next year, leaving 2025 guidance unchanged.

Luca Moro, CIO at energy transition fund SpesX, said the surge was largely driven by enthusiasm for "powering AI" themes, with investors hunting for stocks tied to this trend.

He urged caution, noting the deal had not dramatically changed the fundamentals of the loss-making company.

"The deal is a step in the right direction, but it remains to be seen whether it will generate the cash flows needed to justify current valuations," he said.

Ceres Power has risen almost 300% over the past two months, pushing its market cap close to $1 billion. By 1112 GMT, the FTSE 250 stock was up 21% at 380 pence.

Goldman Sachs this week added the stock to its European conviction list with a 480 pence target, saying the company is positioned to benefit from the next wave of data-centre growth.

UBS expects Ceres to break even a year earlier, in 2026.

(Reporting by Danilo Masoni in Milan, additional reporting by Samuel Indyk in London; Editing by Amanda Cooper)