GS, JPM upgrade Fortum as it wins major deal as part of Google's AI investment

J.P. Morgan and Goldman Sachs expect Fortum FORTUM to boost its earnings and investment prospects after the energy group on Wednesday signed a power supply deal with Google GOOGL.O as part of its $15 billion AI investment in Finland.

Fortum shares rise 4% in early trading, extending Wednesday's gains when they soared 15.8%; they are up 40% YTD.

JPM upgrades the stock to "neutral" from "underperform", saying it had underestimated the scope for data centres and tighter power markets in the Nordics.

Nordic power prices have increased by more than 10% since July, driven by higher gas prices and expectations of higher power demand from data centres, JPM adds.

GS raises Fortum to "neutral" from "sell" and says the Google deal increases the company's hedged share of generated volumes, which could lead to reduced earnings volatility.

GS also raises its target price by 55% to €25.5.