TotalEnergies Powers Up: Energy Giant Expands Electricity Business to Meet Soaring Data Center Demand

In a strategic pivot to capitalize on the digital era's energy hunger, French energy major TotalEnergies SE (NYSE:TTE) is significantly expanding its power generation business. The move comes as analysts point to explosive electricity demand from data centers as a key long-term growth driver.

Investment firm TD Cowen responded to this strategy by lifting its price target on TotalEnergies to $80 from $70, while maintaining a 'Hold' rating on the shares. The firm highlighted the company's growing low-carbon power segment and its potential resource development in Namibia as central to its upgraded valuation.

"TotalEnergies' power segment is uniquely positioned to benefit from the structural, multi-decade growth in data center demand," said TD Cowen analyst Jason Gabelman. He noted that this growth trajectory is expected to extend well beyond 2030. Gabelman also pointed to Namibia's promising offshore resources, which preliminary analysis suggests could support more than two major floating production vessels, potentially boosting the company's free cash flow for the next decade.

The company's operational cash flow forecast for fiscal 2026 slightly missed TD Cowen's estimates. Furthermore, TotalEnergies management indicated openness to acquisitions—both large and small—to address a shortfall in its U.S. natural gas supply, estimated at 1 billion cubic feet per day.

As a global multi-energy company, TotalEnergies produces and markets a portfolio including oil, biofuels, natural gas, renewable energy, and electricity. Its expansion in power generation marks a deliberate shift to align with the world's evolving energy consumption patterns, where electricity demand is increasingly decoupled from traditional industrial cycles.

Market Voices

Michael Rourke, Portfolio Manager at Horizon Capital: "This is a pragmatic evolution. TotalEnergies isn't abandoning its core, but is smartly layering on a high-growth, recurring-revenue business. The data center tailwind is real and durable."

Sarah Chen, Energy Analyst at GreenSight Partners: "While the power segment growth is commendable, the persistent gas deficit in the U.S. is a concern. Their acquisition strategy here will be critical and could dilute returns if they overpay in a competitive market."

David Feld, independent commentator on energy markets: "It's another case of an oil giant trying to paint itself green. Chasing data center demand means locking in with Big Tech and betting on ever-increasing energy consumption—so much for a genuine transition. This is hydrocarbon business as usual, just with a new, power-hungry customer."

Priya Sharma, Infrastructure Fund Manager: "The Namibia potential is the underrated part of this story. If those resources materialize, it provides a valuable, long-life hydrocarbon backbone that funds the expansion into power and renewables. It's a balanced energy transition play."