By Al Root

Whether driven by AI data-center needs or other sources, power demand is growing faster than it has in decades. The world needs more electricity, from all sources. Period. That makes anyone who can quickly deploy energy generation at scale a big winner.

That describes New York-based Brookfield Renewable to a tee.

The operator of power-generating assets within Brookfield Corp. is one of the world's largest renewable-energy players, operating 47 gigawatts of hydro, wind, solar, and distributed power generation, with a pipeline of more than 200 gigawatts under development. It also owns a majority stake in the nuclear reactor and services provider Westinghouse.

Uncertainty around U.S. energy policy for renewable power didn't do much to derail Brookfield Renewable shares in 2025. A lot is clearly going right at the company. For starters, electricity demand is growing from a combination of power-hungry artificial intelligence, the electrification of transportation and industry, and the reshoring of manufacturing.

The U.S. Energy Department forecasts 1% electricity demand growth in 2026 and 3% in 2027, marking the first four-year period of growth since 2000. The rates might seem slow, but total demand could rise by 20%, compared with 2025, by 2030.

Brookfield Renewable's scale has made it a preferred partner for the private and public sectors alike. In 2024, Microsoft tapped it to deploy 10.5 gigawatts of renewable power between 2006 and 2030. In 2025, Alphabet approached Brookfield Renewable to secure three gigawatts of hydro power. And in late 2025, the federal government tapped Westinghouse as a nuclear "national champion" in an $80 billion deal to expand nuclear power in the U.S.

Brookfield also completed the purchase of battery storage company Neoen in early 2015. Renewals for Brookfield's long-term power agreements tend to be at higher rates -- electricity prices are rising.

It all adds up to faster growth than the company has experienced in years. Brookfield Renewable has many ways to win, says Krishna Chintalapalli, portfolio manager of the Parnassus Value Equity fund. "From a short-term perspective, medium perspective, a long-term perspective. I think they're well-positioned."

J.P. Morgan analyst Mark Strouse calls Brookfield Renewable stock a "top pick," pointing out its scale, access to capital, and diversification. These position the company as a winner in the AI/load growth theme. Strouse's price target is $48 a share, up about 11% from recent levels.

(Investors who can own partnerships could buy Brookfield Renewable Partners LP stock, which trades in the U.S. under the ticker BEP. It is the same asset, in partnership form, that trades at a discount. Not all investors can handle the extra rules of partnerships. Strouse's price target for BEP is $34.)

The gain might look a little underwhelming at first glance, but price targets rise with earnings growth. Funds from operations, or FFO, a typical metric for businesses like Brookfield Renewable, have grown at about 9% annually over the past five years, according to FactSet. Wall Street expects almost 20% growth for the coming three years.

That growth could also translate into a richer valuation multiple. Brookfield Renewable's stock trades for about 16 times FFO expected over the coming 12 months. It traded for north of 30 times in 2021, when interest rates were lower. Higher rates are a risk, but faster growth and falling rates can work in investors' favor.

It's easy to picture the stock trading for 20 times 2027 FFO, which would take Brookfield Renewable north of $60 by the end of 2026.

Investors will have to get comfortable with the term "asset recycling," in which Brookfield Renewable sells mature assets and reinvests the proceeds into new, higher-yielding projects.

Critics might argue that failure to recycle could represent a headwind to growth. On the flip side, asset recycling shows that management is continually evaluating the portfolio and seeking better returns. Selling also provides capital for growth. The process isn't going away. Management calls it "core" to the business, and Brookfield is targeting about 10 gigawatts of recycling annually by 2027.

Debt could also give investors pause. The company has more than $35 billion in debt on its balance sheet, accounting for about 40% of total capitalization. That ratio isn't out of line for the utility sector, however. What's more, the debt is tied to power assets. The parent company has an investment-grade credit rating. One reason for that is the stability of cash flows. Most of Brookfield's cash flows are generated under long-term contracts with inflation protection. What's more, most of the debt is fixed-rate with limited near-term maturities.

"Long-term, investment-grade, fixed-rate, local currency non-recourse financing with no cross-collateralization," is how Chief Financial Officer Patrick Taylor describes it. That should be music to the ears of investors who like to dive into balance sheets. Brookfield also maintains billions of dollars in liquidity and partners with companies that can supply even more, if needed.

Partners include the data-center hyperscalers spending vast sums in an AI arms race. Amazon.com, Alphabet, and Meta Platforms plan to spend almost $600 billion on new equipment in 2026, up 60% compared with 2025. Planned spending today means more electricity demanded tomorrow.

To be sure, the Trump administration has de-emphasized renewable energy, killing off some tax credits in the One Big Beautiful Bill Act. Residential solar and offshore wind, two areas Brookfield Renewable has avoided, were hit relatively hard. Solar remains a cost-effective option. It's also much easier and faster to deploy than other options, adds Chintalapalli.

Renewable energy might not supply all of the needs of the growing economy, but will have to be an important part of the mix. And Brookfield Renewable's scale, experience, and ability to rapidly deploy power-generating assets will keep it in the center of all that growth.

"At a simple level, our business produces a product that the world is desperately in need of more of," says Brookfield Renewable CEO Connor Teskey. "The world needs more electricity than ever before."

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February 18, 2026 20:46 ET (01:46 GMT)

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