Sunrun (RUN) is considering expanding its business to provide solar energy to data centers, according to CEO Mary Powell. At the Dervos 2024 conference, Powell stated 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 an excellent growth catalyst for RUN stock.

Why are Sunrun shares rising today?

Today’s positive market momentum is driving solar stocks higher across the board. Sunrun peers First Solar (FSLR) and NextEra Energy (NEE) are both in the green. However, RUN stock could rise today as Wall Street sentiment on this is shifting. GLJ Research recently upgraded it from Sell to Hold, citing favorable demand trends. This, combined with Powell’s update, helps Sunrun continue its five-day winning streak.

Now the company may be about to expand into a fast-growing market. Powell said Sunrun’s future plans “could include working with electric utilities to provide custom solar systems for new data centers or leveraging existing Sunrun systems in nearby communities.” Bloomberg reports that a non-disclosure agreement prevented her from providing 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 supplier of renewable energy, it could take RUN stock to new heights as the market rises.

Is Sunrun Stock a Strong Buy Right Now?

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

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