Goldman Sachs targets 168% upside for Ceres Power on AI energy thesis
Analyst Michele Della Vigna reiterates Buy rating with 930p target, citing asset-light licensing model and solid oxide technology, despite near-term unprofitability.
Goldman Sachs has identified UK-based fuel cell developer Ceres Power as a top European pick for August, projecting a 168% upside over the next 12 months. The investment bank’s recommendation places the company near the top of its August European Conviction List, where it carries the largest forecasted gain among all names included. Analyst Michele Della Vigna reiterated a Buy rating with a 930p price target, a figure derived from the stock’s closing price of approximately 383p on 5 August.
The bank’s thesis centres on Ceres’ solid oxide fuel cell technology as a potential solution to the surging electricity demands of artificial intelligence data centres. Goldman expects global data centre power demand to increase by approximately 160% by 2030. The technology converts fuel such as natural gas or hydrogen into electricity via chemical reaction, enabling on-site power generation without the delays associated with grid connections.
Ceres operates an asset-light licensing model, earning revenue through royalties rather than manufacturing. The company partners with South Korea’s Doosan Fuel Cell and Taiwan’s Delta Electronics to develop and mass-produce systems. Goldman analysts project that this model could drive gross margins above 80% as royalty revenue scales, provided these partners meet commercial production timelines by late 2026.
The recommendation follows a period of significant volatility, with Ceres shares falling more than 31% in July. Goldman views this decline as a buying window rather than a warning sign, noting that the stock has traded up more than 168% year-to-date but remains well below its 52-week high of 872.50p. The bank’s forecast assumes that AI-driven power demand remains robust through the end of the decade.
However, the investment carries substantial risk as Ceres remains unprofitable, with negative earnings per share expected through 2027. This contrasts with established peers such as Bloom Energy, GE Vernova, and Constellation Energy, which offer similar AI demand exposure with proven profitability. The Goldman thesis hinges on partners Doosan and Delta hitting their production targets, making the stock a high-risk, high-reward proposition for investors seeking exposure to the 2026 to 2030 data centre rollout.
