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Alphabet’s Google (NasdaqGS:GOOGL) is expanding its U.S. data center footprint through new long term clean energy agreements with AES Corporation in Texas and Xcel Energy in Minnesota.
The projects are expected to add nearly 2 gigawatts of renewable power capacity to support Google’s data centers and related infrastructure.
The arrangements include long term power purchase agreements, co located energy assets, and investment aimed at grid reliability and local economic support.
For you as an investor, this move sits at the intersection of energy and technology, where reliable power is a core input for cloud computing and AI workloads. Alphabet, through Google Cloud and its broader services, continues to require large scale infrastructure, and these agreements link that growth in demand to renewable energy sources.
Long term power deals of this size can help provide more predictable energy costs and capacity planning, which matters for data center heavy businesses. They also signal how large tech platforms may work more closely with utilities and rural communities as AI and cloud services require additional computing resources.
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4 things going right for Alphabet that this headline doesn’t cover.
✅ Price vs Analyst Target: At US$311.49, Alphabet trades about 17% below the US$376.86 analyst target range midpoint.
⚖️ Simply Wall St Valuation: The shares are described as trading close to estimated fair value, so this news may matter more for long term assumptions than for a quick re rating.
❌ Recent Momentum: The 30 day return of about 5% decline shows recent weakness despite supportive analyst expectations.
There is only one way to know the right time to buy, sell or hold Alphabet. Head to Simply Wall St’s company report for the latest analysis of Alphabet’s Fair Value.
📊 Large scale clean power deals with AES and Xcel tie Alphabet’s growing data center needs to renewable sources, which can help align energy use with its public commitments.
📊 Watch how capital spending on data centers and energy projects flows through to earnings, and how a P/E of about 28.5x compares with the Interactive Media and Services industry average of about 12.3x.
⚠️ The major flagged risk is a high level of non cash earnings, so pay attention to cash flow and any gap between reported profit and cash generation as energy projects ramp.
