Why is Drax stock surging today?

Drax stock surged 8.4% today, hitting an intraday high of 884p, after the company released a regulatory announcement before the London market open confirming a strategic partnership with Brookfield Asset Management and Radiant — Brookfield’s UK-based AI infrastructure platform — to jointly develop, deliver, and operate an AI data centre of more than 1 gigawatt on the Drax Power Station estate in northern England.

The project is structured in phases, with Phase 1 targeting up to 100 megawatts of compute capacity and commercial operations beginning in early 2028, backed by an initial £2.5 billion investment commitment, while total investment could exceed £20 billion if the full project is realised. CEO Will Gardiner stated that "if constructed in full, this project could become one of the largest data centres in the U.K."

JPMorgan analysts responded positively, arguing the announcement could raise the valuation ascribed to Drax’s data-centre ambitions and boost confidence that Drax Power Station will continue operating beyond the expiry of its subsidy scheme in March 2031 — a key overhang for the stock.

The bank also pointed to Brookfield’s involvement as a credibility signal for investors. Citi took a more measured stance, noting that while the scale of the headlines was impressive, no final investment decision had been reached and limited financial detail had been disclosed at this stage.

The broader UK market provided a constructive but unremarkable backdrop, with the FTSE 100 having closed modestly higher in the prior session and the Bank of England’s upcoming interest rate decision keeping investors attentive to UK macro developments. US equity markets were mixed, with the S&P 500 and Dow Jones slightly in the red while the Nasdaq edged marginally higher, reflecting caution ahead of US midterm elections.

Taken together, the scale of the Brookfield partnership — combining Drax’s unique 4-gigawatt grid connection with Brookfield’s capital and Radiant’s AI infrastructure expertise — gave investors a compelling new growth narrative for a stock that had been trading well below its 52-week high of 937.5p.

The deal effectively transformed the market’s perception of Drax from a biomass energy generator facing subsidy uncertainty into a potential cornerstone of the UK’s AI data infrastructure, driving one of the stock’s sharpest single-session gains in recent memory.