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    Drax Group (LSE:DRX) Targets AI Data Centres, Is The Upside Fully Priced?

    Simply Wall St·11/10/2026 21:29:25
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    AI data centre partnership reshapes the Drax Group story

    Drax Group (LSE:DRX) has drawn fresh attention after agreeing a partnership with Brookfield and Radiant to plan a large AI data centre at its North Yorkshire power station site.

    The project framework outlines a potential multi phase buildout targeting more than 1GW of compute capacity, with Phase 1 aiming for up to 100MW from early 2028, subject to planning, regulatory approvals and tenant commitments.

    Recent trading tells a mixed story for Drax Group. The shares are around £8.49 and the 30 day share price return of about 8% sits alongside a 90 day gain near 16%, while the 1 year total shareholder return of roughly 25% and 3 year total shareholder return above 100% point to strong longer run momentum. Investors appear to be reacting to the AI data centre partnership and the earlier Bluefield Solar acquisition as potential growth drivers, even as short term price moves have dipped slightly in the last week.

    Scan other power and infrastructure stocks that could benefit from the same AI data centre tailwind as Drax Group through our curated 42 power grid technology and infrastructure stocks

    The recent jump in Drax Group looks tied to the AI data centre story, not a broad change in mood around utilities. How far does the current valuation already bake that in?

    Most Popular Narrative: 8% Undervalued

    Against the last close at £8.49, the analyst consensus Narrative on Simply Wall St points to a fair value of about £9.25, which implies an 8% gap that hinges on Drax Group executing its shift toward flexibility, batteries, solar and potential data centre income.

    Committed investment of about £500 million into over 700 megawatts of owned and tolled BESS capacity, supplemented by the Flexitricity optimization platform, provides a pipeline of new assets where trading spreads and optimization margins directly feed into Group EBITDA and could change the mix of earnings toward flexibility and ancillary services.

    See why 32 investors see Drax Group as 8% undervalued.

    Result: Fair Value of £9.25 (UNDERVALUED)

    Still, the Drax Group story could shift fast if large projects overrun on cost or if new flexible assets fail to deliver the cash flows that analysts assume.

    Find out about the key risks to this Drax Group narrative.

    Next Steps

    If this mix of optimism and concern around Drax Group feels finely balanced, consider acting promptly and review the full picture of 2 key rewards and 4 important warning signs

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