Energy Stocks Ride the AI Boom! Price Targets Rise! SMA Solar, Bloom Energy and RE Royalties in Focus

RE Royalties: Management Dissatisfied with Stock's Performance

RE Royalties is positioning itself in a rapidly growing market with an unusual business model. The Canadian company was one of the first providers to apply the royalty model, familiar from the commodities sector, to renewable energy. In recent years, it has invested in 135 projects, including solar and wind farms, battery storage systems, and hydropower. More than 80% of the portfolio is located in North America.

The potential lies in a financing gap that traditional banks often fail to address. Large institutions focus primarily on projects in the range of hundreds of millions or billions, while small and medium-sized project developers require approximately CAD 10 to 30 million. This is precisely where RE Royalties steps in with flexible financing solutions. The company combines long-term royalty structures with shorter-term loans, enabling it to generate both ongoing interest income and long-term stakes in project revenues.

The growing global demand for capital to fund new power generation is providing a tailwind. In particular, AI data centers, industrial electrification, and the desire for greater energy security are driving demand. At the same time, decentralized energy generation is gaining importance because grid expansion and new transmission lines are progressing slowly in many places. For RE Royalties, this is an attractive environment.

Another key driver is the scalability of the business model. According to management, revenues could rise significantly without administrative costs increasing at the same rate. New royalty revenues would thus have a disproportionately large impact on earnings.

The stock surged at the beginning of the year and has been trading sideways since mid-February. It is currently trading at around CAD 0.375. Management is not satisfied with this and is therefore exploring various options to increase shareholder value. Strategic or co-investment partnerships are among the options, as are adjusting the capital structure through equity or debt, and a complete sale of the company. Until the stock rallies again, shareholders can look forward to a dividend of CAD 0.04 per share. This amount was distributed last year, resulting in a dividend yield of over 10%.

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SMA Solar Raises Full-Year Guidance

SMA Solar is currently among the German beneficiaries of the energy boom. Shares of the inverter specialist have gained nearly 70% year-to-date. The company recently surprised the market by reporting strong second-quarter results and raising its full-year guidance.

SMA Solar posted significantly better results in the second quarter of 2026 despite a slight decline in revenue. Revenue was provisionally reported at EUR 345.7 million, down from EUR 357.1 million in the prior year. EBITDA jumped from EUR -15.5 million to EUR 64.7 million, clearly exceeding analysts' estimates of EUR 44 million. EBIT also came in significantly higher at EUR 51.5 million compared to the expected EUR 32 million. Tailwinds included earlier-than-expected refunds of previously levied IEEPA duties as well as the reversal of inventory write-downs.

Due to the improved market environment, positive operating performance, and more favourable exchange rates, SMA has raised its forecast for 2026. The Group now expects annual revenue of between EUR 1.625 and 1.725 billion. Previously, management had projected only the upper end of the previous EUR 1.475 to 1.675 billion range. For EBITDA, SMA now expects EUR 180 to 230 million, whereas previously only the upper end of the EUR 50 to 180 million range had been forecast. SMA is expected to publish its full 2026 half-year report on August 13, 2026.

Following the earnings release, Jefferies raised its price target for SMA shares from EUR 80 to EUR 87 and reaffirmed its "Buy" recommendation. Deutsche Bank significantly increased its price target from EUR 44 to EUR 75. The rating was upgraded from "Hold" to "Buy." Analysts highlighted the positive development in battery storage and see this as the basis for a revaluation of the company.

Bloom Energy: Analyst Raises Price Target

Bloom Energy is a major beneficiary of the AI boom in the US. The company develops and manufactures fuel cell systems that reliably supply data centers with electricity on-site. This year, Bloom expects to generate revenue of between USD 3.4 billion and USD 3.8 billion. Over the past 52 weeks, the stock has risen by over 700%. This figure takes into account a drop of over 30% in the past four weeks. The current share price is USD 226. In June, it had already reached USD 350. The market capitalization currently stands at over USD 64 billion.

Bloom Energy recently announced that its partnership with Brookfield is taking on a new dimension. Brookfield is increasing the financing framework for joint energy projects in the field of AI infrastructure from the previous USD 5 billion to USD 25 billion.

For Bloom Energy, the expansion of the partnership means a significant acceleration in growth. The company's fuel cell systems can generate electricity on-site, reducing dependence on time-consuming grid connections. This is a decisive advantage, particularly for operators of AI data centers, as the availability of large amounts of electricity is increasingly becoming a bottleneck in the construction of new sites. According to the companies, demand from hyperscalers and AI infrastructure developers is growing correspondingly strongly. Brookfield aims to consolidate capital, power supply, computing power, and data center infrastructure from a single source wherever possible.

The billion-dollar partnership is part of an even larger AI strategy by Brookfield. The AI Infrastructure Fund, launched in November 2025, is set to invest up to USD 100 billion in total and will focus on large AI data centers, energy supply, computing infrastructure, and strategic investments. Brookfield has already invested more than USD 100 billion in digital infrastructure and clean energy. For Bloom Energy, the expanded partnership thus opens the door to a financially strong partner capable of implementing large-scale projects worldwide.

On Tuesday, JPMorgan raised its price target for Bloom Energy shares from USD 267 to USD 346.

AI's energy appetite will continue to drive the sector. Bloom Energy is a core investment in the US, though it is highly volatile and anything but cheaply valued. RE Royalties offers an attractive dividend yield. Management is working to break the share price out of its sideways trend. SMA Solar surprised the market in the first quarter. Analysts see further upside potential.