Two Green Energy Stocks for a Data-Centric 2026: Brookfield Renewable and Clearway Energy

The investment case for renewable energy is being redefined, not by incremental policy tweaks, but by a powerful confluence of structural forces. The dominant narrative for 2026 centers on a bifurcated opportunity: companies positioned to capture immediate, massive power demand from data centers while navigating a complex policy environment, versus those exposed to longer-term, more volatile market cycles. This shift is driven by three interlocking megatrends.

First, the policy landscape itself is undergoing a recalibration. 2026 will be a pivotal year for US energy policy and markets, defined by a new priority for affordability and reliability amid accelerating load growth. This is giving rise to a renewed "all-of-the-above" approach to generation, explicitly aimed at powering data centers and the broader economy. The strategy prioritizes maximizing domestic production across the board, including fossil fuels, geothermal, and nuclear, while asserting stronger federal authority over infrastructure. This creates a more competitive and less ideologically driven environment for new build-outs, where projects that can demonstrate clear economic and reliability value will have a path forward.

The most significant near-term demand shock, however, is coming from within the economy. Data centers, especially those serving artificial intelligence (AI) workloads, are transforming electric load forecasts and reshaping the electric grid. Operators are moving from passive grid reliance to a "behind-the-meter" strategy, deploying natural gas, storage, and even exploring nuclear repowering to secure 24/7 power quality. This isn't just incremental growth; it's a fundamental shift in grid planning and siting, with "power-first" site selection potentially reshaping regional development. The scale of this demand is political, as regulators and politicians grapple with the allocation of build-out costs and the impact on consumer prices. For energy companies, this means a direct, high-quality demand channel, but one that requires strategic partnerships and long-term contracts to secure.

Beneath these immediate pressures lies the enduring, multi-trillion dollar structural megatrend: the global economy's transition to cleaner energy sources. The global economy is rapidly transitioning to new energy sources, driven by climate concerns and the decarbonization imperative. This is a multi-decade investment opportunity that will require trillions in annual capital. The companies best positioned to benefit are those with the scale, financial strength, and strategic foresight to navigate both the near-term data center boom and the long-term energy transition. The thesis for stocks like Brookfield Renewable and Clearway Energy hinges on this duality: their portfolios of long-term power purchase agreements (PPAs) provide the stable cash flow and visibility to fund the build-out, while their strategic positioning in key markets aligns them with the dominant demand drivers of the decade.

Brookfield Renewable Partners (BEP): Securing the Data Center Supply Chain

Brookfield Renewable has positioned itself as a critical supplier in the data center boom, leveraging its scale and strategic foresight to lock in demand from a major tech anchor. The company's landmark move was a first-of-its-kind Hydro Framework Agreement with Google, designed to deliver up to 3,000 megawatts of hydro capacity. This deal is a direct response to the sector's need for reliable, clean baseload power, providing a multi-decade, high-quality offtake that de-risks future development and secures a significant portion of its growth pipeline.

This strategic focus is underpinned by a robust financial profile. For the full year 2025, the company delivered record results, with Funds From Operations (FFO) per unit reaching $2.01, a 10% increase year-over-year. That strong operating performance, driven by a diversified global portfolio and successful commercial initiatives, extended its leadership position and provided the capital needed to fund further growth. The company's model of selling power under long-term contracts provides a stable cash flow profile, which is essential for financing the large-scale projects required to meet data center demand.

Brookfield's strength lies in its ability to offer the "any and all" forms of energy that the new policy environment prioritizes. Its portfolio, which includes almost half hydroelectric power, gives it a unique advantage in providing the reliable baseload that data centers require for 24/7 operations. This is complemented by a growing pipeline of solar and wind projects, creating a diversified solution for its corporate clients. In essence, Brookfield is not just a generator; it is becoming a strategic partner in securing the clean energy supply chain for the next wave of digital infrastructure.

Clearway Energy (CWEN): Navigating the Transition with a High-Yield Profile

Clearway Energy presents a classic investment tension: a high-yield profile supported by strong recent earnings, yet facing a top-line headwind that demands scrutiny. The company's financial story is defined by a stark disconnect between its bottom-line performance and its revenue trajectory. For the third quarter of 2025, Clearway reported an EPS of $2.00, a massive beat against consensus estimates. Yet, this accounting strength was paired with a 11.7% year-over-year decline in quarterly revenue to $429 million. This divergence suggests the earnings beat was driven by cost management or one-time items, not a revival in core business volume. For investors, the critical question is whether this revenue pressure is a temporary blip or a sign of structural challenges in the power markets it serves.

Valuation amplifies this tension. With a trailing P/E ratio of 15.37, the stock trades at a premium to its own historical average, especially given the projected earnings decline. The market is clearly pricing in growth expectations, but the recent revenue trend complicates that narrative. The stock's proximity to its 52-week high indicates that optimism is already baked in, leaving little room for disappointment. This sets up a high-stakes catalyst in the upcoming earnings report.

The company's next earnings date is estimated for February 23, 2026. This report will be the definitive test. It must clarify whether the Q3 revenue drop was an anomaly or the start of a trend. Given the broader context of shifting power markets and the data center boom, Clearway's ability to secure new, long-term contracts will be paramount. The high yield and elevated valuation demand proof that the company is not just managing costs, but actively capturing new demand. Until that evidence is presented, the stock's premium multiple remains a bet on a turnaround that is not yet visible in the top-line numbers.

February Catalysts and Forward-Looking Risks

The investment theses for both Brookfield Renewable and Clearway Energy now face a critical test. The immediate catalyst is the execution of their strategic plans into tangible, reliable cash flow. For Brookfield, the landmark Hydro Framework Agreement with Google to deliver up to 3,000 megawatts of hydro capacity is the centerpiece. This deal must translate from a commercial milestone into the steady, inflation-linked cash flows that justify its premium valuation. The company's record Funds From Operations of $1,334 million for 2025 provides the capital, but the path forward depends on successfully developing and commissioning projects at scale. For Clearway, the catalyst is simpler but more urgent: its upcoming earnings report. The stock's high yield and elevated multiple are a bet on a turnaround, but recent financials show a stark disconnect between strong EPS and declining revenue. The February report will be the first concrete data point on whether that revenue pressure is a temporary anomaly or the start of a structural trend.

A major structural risk looms on the policy front. The new "all-of-the-above" strategy for powering data centers introduces a layer of jurisdictional complexity that could delay or increase the cost of new builds. 2026 will be defined by contested jurisdiction between states and Washington, DC over permitting and siting. This friction is a direct headwind for companies like Brookfield, which are scaling up projects across multiple regions. Delays in federal approvals or conflicts over cost allocation for grid upgrades could erode project economics and timelines, testing the patience of investors banking on near-term growth.

For Clearway, the near-term event is its Q4 earnings report, expected in late February. This is the definitive test of its financial resilience. The company must provide clarity on the drivers behind the 11.7% year-over-year decline in quarterly revenue to Q3. If the report confirms a persistent top-line weakness, it will undermine the growth narrative supporting its premium valuation. Conversely, if management can point to new contract wins or operational improvements that signal a stabilization, it could validate the high-yield thesis. The stock's proximity to its 52-week high means there is little margin for error; the February report must deliver proof of a sustainable recovery.

Conclusion: What to Watch in the Data-Centric Energy Transition

The investment thesis for renewable energy in 2026 hinges on a single, critical interplay: the successful monetization of long-term contracts against the volatile execution of projects. The data center boom provides a powerful demand anchor, but the payoff depends entirely on a company's ability to convert that visibility into reliable, cash-generating assets. For Brookfield Renewable, the landmark Hydro Framework Agreement with Google to deliver up to 3,000 megawatts of hydro capacity is the blueprint. This deal exemplifies the successful monetization of long-term contracts, securing a multi-decade, high-quality offtake that de-risks future development. The company's record Funds From Operations of $1,334 million for 2025 provides the capital to fund this build-out, but the path forward is now about execution.

For companies like Clearway Energy, the challenge is more immediate and defensive. The core investment case here is about navigating near-term revenue headwinds while maintaining financial discipline. The stark disconnect between a strong EPS of $2.00 and an 11.7% year-over-year decline in quarterly revenue underscores the tension. The high yield and premium valuation demand proof that the company is not just managing costs, but actively capturing new demand. The upcoming earnings report is the definitive test of this thesis.

The key watchpoints for both companies, and for the broader sector, are now clearer. First, monitor the execution of announced projects. For Brookfield, this means tangible updates on the implementation timeline and development progress for the Google partnership. For Clearway, it means any new contract wins or operational improvements that signal a stabilization of its top line. Second, track the pace of data center interconnection approvals. The sector's shift to a "behind-the-meter" strategy is a direct response to multi-year grid delays, so any acceleration in permitting for new build-outs will be a positive signal for energy suppliers. Third, watch for shifts in regulatory policy. The new "all-of-the-above" strategy introduces a layer of contested jurisdiction between states and Washington, DC, which could either facilitate or hinder renewable builds. This friction is a direct headwind for scaling projects.

For February, the focus is squarely on these catalysts. The market's attention will be on Clearway's estimated earnings date for February 23, 2026. The report must clarify the drivers behind the recent revenue pressure and provide a credible path forward. For Brookfield, the focus is on any updates from the company on the implementation timeline for its landmark Google partnership. The successful execution of this deal will be the clearest validation of its strategic positioning in the data-centric energy transition. The bottom line is that the thesis is now in the execution phase. The contracts are signed, the demand is clear, but the real test is whether companies can deliver the promised cash flows on schedule.