What on earth is going on with Ceres Power shares?

Superb issues are taking place with Ceres Power (LSE: CWR) shares. The share value within the inexperienced power inventory is up 531% since April final 12 months. Analysts’ forecasts are getting upgraded, and the corporate has re-entered the FTSE 250.

Eager observers will be aware we’re nonetheless far from all-time highs. The present 303p share value seems to be tiny in comparison with earlier highs of 1,576p in 2021 and a pair of,612p all the way in which again in 2007. What’s going on right here? And will Ceres Power shares be one of many London Inventory Alternate‘s greatest bargains?

Let’s have a fast refresher on what the corporate does. Ceres designs stable oxide gas cells – a type of clear and inexperienced power. They will run on each fuel and hydrogen, making them appropriate for power wants right this moment and sooner or later.

Why have the shares been surging? It’s due to – shock, shock – synthetic intelligence. The necessity for huge quantities of power for AI information centres has pushed up renewable power shares left, proper, and centre. The shares in one other British inexperienced power agency – ITM Power – flew increased in 2025 too.

Maybe the important thing element is the delays for different sources of power. Wait instances for grid connections and supply of fuel generators are mentioned to be pushing 5 years or longer. That’s too lengthy to attend for the primary gamers caught up within the AI revolution.

Briefly, this is an oblique AI play. The expectation is that the courageous new world that synthetic intelligence would possibly usher in will probably be powered (not less than partially) by forward-thinking power companies.

All this has resulted in among the most bullish analyst forecasts you’ll discover this aspect of the Atlantic. Goldman Sachs put a value goal of 530p on Ceres Power. If that focus on is on the cash then traders may anticipate a £10,000 funding to show into £17,492 within the subsequent 12 months.

Loopy swings

As shiny as all which may sound, this is nonetheless a pre-earnings firm. There is a number of danger shopping for inventory in an organization that hasn’t confirmed itself able to turning a revenue but.

A method we will get an concept of valuation with these firms is to have a look at income. Ceres Power achieved gross sales of £32m inthe monetary 12 months 2024. Evaluating that to its market cap of £600m offers up a price-to-sales ratio of round 20. That’s eye-wateringly excessive.

Most of these shares usually tend to have loopy swings in worth. It’s true sufficient for Ceres. Regardless of rocketing up over 5 instances in worth within the final 12 months, the share value is nonetheless down 88% from its all-time excessive. That top was reached in 2007 too, exhibiting the unlucky actuality of anybody who was enthusiastic about this tech a few a long time in the past. We’re now 18 years on and traders who picked the unsuitable time have misplaced some huge cash.

Ceres Power will get its identify from Ceres, the Roman goddess of agriculture. Is that identify a portentous signal of future progress within the share value? May traders be taking a look at a bountiful harvest as soon as this new know-how hits the mainstream? Solely time will inform for certain. However I feel the inventory is value contemplating for these conscious of the dangers.