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

Sunrun (RUN) is considering expanding its operations to power data centers with solar power, according to CEO Mary Powell. At the Dervos 2024 conference, Powell explained that the company is exploring new opportunities, including potentially using its solar energy technology to power data centers. If Sunrun enters this market, it could be a great growth catalyst for RUN stock.

Why is Sunrun stock rising today?

Positive market momentum is giving solar energy stocks a boost across the board today. Sunrun competitors First Solar (FSLR) and NextEra Energy (NEE) are both in the green. However, RUN stock could rise today as Wall Street sentiment toward it changes. GLJ Research recently upgraded it to “Hold” from “Sell,” citing favorable demand trends. Combined with Powell's update, this helps Sunrun continue its five-day winning streak.

Now the company may be poised to expand into a fast-growing market. Powell explains that Sunrun's future plans could include “working with utilities to provide customized solar systems for new data centers or leveraging existing Sunrun systems in nearby communities.” Bloomberg reports that a nondisclosure agreement prevented them from offering more context.

Entering the data center space is a highly strategic maneuver. Recent data shows that the market is expected to grow 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 provider of sustainable energy, it could take RUN stock to new heights as the market booms.

Is Sunrun stock a good buy right now?

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

See more RUN analyst ratings

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