Tech giant Amazon (AMZN) said on Monday that it plans to invest $20 billion to build two new data centers in Pennsylvania. Interestingly, one of them will be built next to a nuclear power plant in a setup that has caught the attention of federal regulators. Meanwhile, the other site will be located just north of Philadelphia, according to Kevin Miller, who is the Vice President of Global Data Centers at Amazon Web Services (AWS).
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Amazon’s new Pennsylvania projects come after similar $10 billion data center investments in North Carolina, Mississippi, Indiana, and Ohio earlier this year. Indeed, the company is racing to grow its infrastructure as it competes with other tech giants to support the growing demand for artificial intelligence. This is because AI and cloud computing require a lot of power, which means that more data centers are needed for servers, storage, network systems, and cooling equipment.
Amazon’s Nuclear Power Plant Deal
It is worth noting that the project near the Susquehanna nuclear power plant involves a deal Amazon made last year with Talen Energy, the plant’s majority owner. Amazon bought Talen’s data center for $650 million and plans to use up to 960 megawatts of power, which is roughly 40% of the plant’s output, or enough to supply over half a million homes.
But the agreement, which allows Amazon to connect directly to the power plant in what’s called a “behind the meter” deal, is under review by the Federal Energy Regulatory Commission. Regulators are now investigating whether granting direct access to large power users, such as Amazon, could reduce power availability for others and allow them to avoid paying their share of grid costs.
Is Amazon Stock Expected to Rise?
Turning to Wall Street, analysts have a Strong Buy consensus rating on AMZN stock based on 47 Buys and one Hold assigned in the past three months, as indicated by the graphic below. Furthermore, the average AMZN price target of $241.64 per share implies 12.2% upside potential.
See more AMZN stock analyst ratings
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