Energy companies are raising money at IPO at their fastest pace this century, taking advantage of investors’ hunt for new ways to bet on the boom in power-intensive AI data centres.
Initial public offerings for energy firms raised $12.6bn in the first half of this year, according to data firm Dealogic. That marks the highest half-year level since the peak of the dotcom bubble in late 1999 and the highest first-half figure on record. It is well above 2025’s full-year total of $4.3bn.
The surge in fundraising comes as access to the vast amounts of energy needed to run data centres emerges as a bottleneck in a multi-trillion-dollar AI investment boom.
“Investors started by buying AI-linked names like Nvidia. Then they said, ‘hold on, every chip needs energy to power it’,” said RBC clean energy analyst Chris Dendrinos. “That’s put a huge tailwind behind these companies.”
A typical AI-focused data centre uses around 876,000 megawatt hours per year, roughly equivalent to the household electricity usage of Glasgow or Salt Lake City. US electricity demand is projected to increase 39 per cent between 2026 and 2035, according to consultancy ICF, in large part due to ballooning demand from data centres.
Investors who have made huge gains betting on the chip stocks that have recently propelled US equity markets to a series of record highs are slowly shifting into the so-called “picks and shovels” companies expected to lay the infrastructure for the AI boom, analysts say.
“Power‑capacity expansion, US reshoring [and] AI‑related infrastructure investment . . . remain our central strategic allocations,” said Manish Kabra, head of US equity strategy at Société Générale.
Exchange traded fund-provider GMO this week launched a “power infrastructure ETF” to capture the returns of stocks linked to “power generation, grid and electrification infrastructure”. Energy group Standard Nuclear is expected to go public in the US later in July.
The 2026 IPO market will be remembered both for SpaceX and as “the year that financed the AI revolution’s infrastructure”, said Bill Smith, head of IPO data provider Renaissance Capital.
Among companies coming to market is Forgent Power Solutions, which designs and manufactures electrical distribution equipment used in data centres. It raised $1.7bn from its IPO in February, capitalising on strong demand and long wait times for technologies such as transformers and switchgears, which are used to protect electrical equipment.
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Innio, a German gas engine manufacturer, completed a nearly $2.8bn flotation in June, riding a trend of data centres bypassing the strained electricity grid and instead powering themselves on-site.
Companies that have been able to raise money on public markets include those involved in complex, capital-heavy projects such as nuclear and geothermal power plants, while investors have also been willing to back businesses trying to develop new technologies.
“This is a moment in which speculative projects are being funded and underwritten,” said Julien Dumoulin-Smith, a Jefferies research analyst covering power, utilities and clean energy. “They’re not just limited to venture capital or private equity.”
Fervo — which went public in May, raising nearly $2.2bn — is developing “next-generation” geothermal, using oil and gas drilling methods to create underground wells to tap heat. Unlike conventional geothermal, which is widely used and relies on naturally occurring heat pockets, next-generation geothermal is being deployed in pilot-stage projects in the US.
According to its prospectus, the company will spend $1.2bn over the next year to develop its Utah power station.
Chief executive Tim Latimer told the FT that the company and its investors saw public markets as a way to grow quicker.
“These IPO proceeds and the market enthusiasm behind our goal are going to help us accelerate,” he said.
Investors have also been attracted by the relatively lower valuations at which energy companies often trade, with the energy sector on a price-to-earnings ratio of 18 times, compared with the information technology sector’s 40 times, according to Bloomberg data.
Investor interest in these IPOs comes amid growing concerns over whether hyperscalers, whose shares have soared in recent years, will be able to convert their huge spending into profits. Many traders are instead starting to look at smaller companies or those in other sectors that are likely to benefit from this wave of investment.
However, despite the surging demand for energy and the strong interest in the IPOs, there are signs that investors are buying into hot stocks at flotation, only to sell out shortly afterwards.
Nearly two-thirds of the energy companies that floated this year and last are now trading below their offer price, according to Dealogic. That compares with less than 40 per cent of IPOs across all sectors that are underwater.
X-energy, which develops small modular nuclear reactors and is backed by Amazon, came to market in April and is now trading 33 per cent below its $23 offer price. ERock, a gas generator maker, has lost 42 per cent of its value since its IPO in June, while Fermi, a data centre energy company, is down 68 per cent since coming to market in September.
Deep Fission, which is designing nuclear reactors to be buried in one-mile underground holes, raised $40mn in June, a 73 per cent cut from its initial target. The company’s shares are down 33 per cent from its Wall Street debut.
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Brian Kessens, senior portfolio manager at energy-focused fund firm Tortoise Capital, said some traders are buying into IPOs then selling quickly and “rolling into the next one”.
Investment banks need to make sure they’re setting “reasonable valuations” and be more careful about selling shares to investors who are likely to flip fast, he added.
“If you think that an IPO is going to go really well, then it’s in some sense free money,” said RBC’s Dendrinos.
Some companies, like X-energy and Deep Fission, are developing technologies that critics say are not yet proven to be technically or commercially viable.
Often those faring better have “a real business now”, said Jeff Osborne, a sustainability and energy transition analyst at TD Cowen, and are “less of a science experiment”.
Additional reporting by George Steer. Data visualisation by Nolan Shaffer
