Chevron's (CVX) Kilby power project differentiates the company from its global peers and could become a new earnings growth driver while supporting a higher valuation over time, UBS Securities said.
The brokerage said in a Wednesday note that the 2.67-gigawatt project, being developed with Joulent to supply power to a Microsoft (MSFT) data center under a 20-year agreement, could become one of the largest-if not the largest-behind-the-meter power projects developed to date.
UBS also said Microsoft could expand its electricity demand over time, creating further upside for the project.
The investment firm said National Grid Ventures' $1.75 billion investment for a 35% stake in Joulent suggests the company is emerging as a significant infrastructure platform tied to AI-driven power demand.
UBS has a buy rating on the stock, with a price target of $220 per share.
Shares of Chevron were up 1.6% in Thursday trading.
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