A Spot of Growth: Data Centers & Two Rather Promising Ventures

Fluence Energy

Modern data centers, you understand, are frightfully particular about their power supply. No surges, no spikes, and absolutely no wobbly sine wave frequencies. It’s a delicate business, demanding a certain… finesse. Fluence Energy (FLNC 7.58%) provides precisely that finesse, crafting industrial-scale battery modules that deliver the pristine energy these demanding servers require. It’s a particularly inspired pairing when combined with renewable sources – wind or solar, you see – as Fluence’s battery packs allow one to store up energy for a rainy day, or, in this case, when the wind isn’t blowing and the sun has decided to take a holiday.

The company itself is a rather agreeable combination, formed in 2018 as a joint venture between the industrial giant Siemens and the power generation experts at AES. Revenues have been a bit flat of late, even dipping slightly in the last year, but the analysts are predicting a rather dramatic upturn. Two years hence, they foresee sales leaping upwards by a most impressive 57%! A hockey stick moment, as the chaps across the pond would say.

And what’s fueling this impending growth spurt? Data centers, naturally. As CEO Julian Marquez confided in the last quarterly earnings call, data centers represent their biggest opportunity. They currently have 36 gigawatt-hours of data center projects in development, none of which are yet reflected in their official order backlog, but a jolly good prospect nonetheless. As of last September, they had a total installed capacity of 46 gigawatt-hours.

Long story short, Fluence should be receiving a rather substantial influx of data center orders in the coming years. Some skeptics are muttering about the lack of signed contracts, but one shouldn’t let a little uncertainty ruffle one’s feathers. The stock is a bit richly valued, admittedly, but well worth a nibble, thanks to this explosive data center opportunity. Growth investors, you see, don’t always mind paying a premium price for a stock with a bit of pep, and Fluence appears poised to join that exclusive club.

Credo Technology

Data center operators, bless their pragmatic hearts, are always on the lookout for improvements. If a change promises higher performance or lower costs, they’re all ears. Credo Technology (CRDO 4.69%) offers just such an improvement, with its high-speed networking tools. They can reduce power consumption and cooling requirements without sacrificing a jot of network performance. A dashedly clever bit of engineering, what!

Credo’s Active Electrical Cables (AECs) can deliver data flows at up to 0.8 terabits per second – or twice that with their brand-new fourth-generation products – using copper cables with directly attached traffic management chips. It’s comparable to the latest fiber-optic networks, while consuming considerably less electric power. A rather ingenious solution, wouldn’t you say?

There is a slight limitation, admittedly. The cables can’t exceed 7 meters (21 feet), but that’s hardly a problem in the densely packed environment of a modern data center. AEC is a perfect match for the data-hungry beast, providing precisely what it needs.

The company is a strong innovator, and other network hardware manufacturers pay significant royalties for the serializer-deserializer technology at the heart of those high-speed AEC connections. A rather lucrative arrangement, I daresay.

Most of Credo’s revenues currently come from a handful of hyperscalers. One unnamed client, in fact, accounted for a staggering 67% of total revenues in fiscal year 2025. This makes sales a bit lumpy, dependent on the investment whims of these mega-clients. But it’s an incredible business, nonetheless. In their just-released preliminary report for Q3 2026, Credo pointed to revenues near $406 million – triple the $135 million seen in the year-ago period. A most impressive leap!

This little networking expert is going places, one data center at a time. A thoroughly promising venture, wouldn’t you agree?

2026-02-12 09:13

Fluence Energy

Credo Technology

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