Sunrun (NASDAQ:RUN) is considering expanding into the data center market

On By Littum

According to CEO Mary Powell, Sunrun ( RUN ) is considering expanding its operations to provide solar power to data centers. At the Dervos 2024 conference, Powell said the company is exploring new opportunities, which could include using its solar technology to power data centers. If Sunrun ventures into this market, it could be an excellent growth-driving catalyst for RUN stock.

Why is Sunrun stock rising today?

Positive market momentum is lifting solar stocks across the board today. Sunrun peers First Solar ( FSLR ) and NextEra Energy ( NEE ) are both in the green. However, RUN stock may rise today because Wall Street sentiment against it is shifting. GLJ Research recently upgraded it from a sale to a hold, citing favorable demand trends. This, combined with Powell’s update, helps Sunrun continue its five-day winning streak.

Now the company may be expanding into a fast-growing market. Powell states that Sunrun’s future plans “could include partnering with utility companies to provide custom solar systems for new data centers or leveraging existing Sunrun systems in nearby communities.” Bloomberg reports that a nondisclosure agreement prevented her from offering more context.

Entering the data center is a highly strategic maneuver. Recent data shows that the market is expected to expand at a CAGR of 11.39% between 2024 and 2034, reaching a value of $364.62 billion. This suggests that companies will invest in building more data centers. If Sunrun can position itself as a reliable supplier of sustainable energy, it could take RUN stock to new heights as the market rises.

Is Sunrun Share a strong buy right now?

As for Wall Street, analysts have a moderate buy consensus rating on RUN stock based on 12 buys, six holds and zero sells assigned in the past three months, as shown in the graphic below. After a 70% increase in RUN’s share price over the past year, the average RUN price target of $23 per share implies share an upside potential of 50%.

See more RUN analyst ratings

While GLJ maintains its Hold rating, other analysts are more positive on RUN stock. RBC Capital’s Chris Dendrinos recently reiterated a Buy rating and a bullish price target of $19, implying 26% upside. Piper Sandler’s Kashy Harrison, which also maintains a Buy rating, has a $23.00 price target, implying a 52% upside.