AI’s Energy Crunch Has Investors Searching for Next IPO Winners

(Bloomberg) — The artificial intelligence boom has a power problem, and Wall Street is betting billions on companies that promise to solve it — even if some of the technology hasn’t been fully developed yet.

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At least 10 power infrastructure and clean technology companies have gone public so far this year, including geothermal firm Fervo Energy Co., which soared 35% on its first day of trading. The firms raised upwards of $11.6 billion so far in 2026, the most on record for the sector.

The IPO market has been heating up with data centers in the US expected to need more than 77 gigawatts of capacity in 2030, up from 41 gigawatts in 2025, according to BloombergNEF estimates.

But the enthusiasm comes with risks. Wild swings in SpaceX stock after Elon Musk’s aerospace and AI conglomerate made its historic debut warn of the perils investors face when they make bets on high-risk, high-reward clean energy.

“You’ll have likely some winners and roadkill along the way,” said Jeff Osborne, a managing director at TD Cowen.

Cash-rich firms like Meta Platforms Inc., Amazon.com Inc. and Microsoft Corp., with their willingness to tolerate risk and underwrite innovation, have juiced the rush to list.

“There’s going to be more of it, and it’s going to be led and enabled by the hyperscale community,” said Jefferies analyst Julien Dumoulin-Smith, referring to investment in clean tech. “This is the culmination of years of grinding work to commercialize technologies and find offtakers.”

When private capital isn’t enough, not-yet-profitable companies turn to the public market. Fervo raised $1.89 billion from eager investors in May — even though its geothermal technology hasn’t yet reached a commercial scale.

New technologies “don’t have access to the same capitalization tools,” said David Ulrey, Fervo’s chief financial officer.

Fervo and other geothermal firms have benefited from a supportive White House. President Donald Trump has been even more vocal in touting nuclear power plants as a key source of energy for data centers. Even the renewable technologies that Trump has attacked, like wind and solar, can excite markets if they promise to supply AI data centers.

The same goes for power infrastructure suppliers. Forgent Power Solutions Inc., a maker of electrical equipment and systems for data centers, has more than doubled since its February IPO, while Madison Air Solutions Corp., which sells liquid, hybrid and air cooling products for data centers, raised $2.23 billion in April in the biggest US listing of an industrial firm in close to three decades.

The excitement has allowed newly public companies to return to the market. Since its February IPO, Forgent has listed two more equity offerings for roughly $3 billion. Even industry stalwarts are raising more cash. Constellation Energy Corp., the largest nuclear operator in the US, offered shares worth about $3.1 billion in June.

But some worry SpaceX and the next mega IPOs, namely OpenAI and Anthropic, will tax investors’ capacity to keep buying other stocks.

“The most vulnerable stocks should logically be those which have drawn the highest incremental inflows of late, which are the AI picks and shovels plays, as well as of course the hyperscalers,” Christopher Wood at Jefferies wrote in a note to clients before SpaceX’s debut.

The recent market selloff also shows how quickly the market can change its mind about AI.

Some companies are struggling to make it through the long, complicated IPO process, which comes with much scrutiny and due diligence, according to John Vetterli, partner and co-lead of global capital markets practice at the law firm White & Case.

That scrutiny can be daunting. Deep Fission Inc., an advanced nuclear technology company, raised $40 million in its June IPO, significantly less than the $156 million the company had initially targeted.

For companies still years away from commercialization, a faster, less rigorous route to the market exists. A special purpose acquisition company merger lets a company enter the public markets without a traditional IPO’s vetting.

General Fusion Inc. plans to merge with a blank check company at a $1 billion valuation in the coming weeks. The Canadian company is working to build a power plant that uses nuclear fusion, a lofty goal for a process that’s never been achieved outside of a few times in a lab. Projections for when the US will achieve nuclear fusion range from several years to a decade or more.

“Investors in SPACs may have a higher appetite for that kind of risk,” said Nandan Nelivigi, a partner in the project development and finance group at White & Case.

General Fusion’s Chief Executive Officer Greg Twinney sees it differently. The company has been working on this technology for a very long time, he said, and going public lets the firm communicate with a “broader set of investors.”

Companies that have gone public via SPAC deals can be volatile. ESS Tech Inc., a battery-storage technology firm, went public via a SPAC in 2021. Its market value peaked at $2.5 billion shortly after the deal closed. It’s now worth less than $25 million.

Meanwhile, more IPOs are coming, including Standard Nuclear Inc., a maker of fuel for advanced nuclear reactors.

“Capital is concentrating around companies perceived as important to AI deployment and infrastructure build-out,” said Natalie Hwang, founding managing partner at investment firm Apeira Capital Advisors. If this next series of thematic IPOs does well, “that can boost confidence for a broader set of companies.”

–With assistance from Anthony Hughes.