How data centres could lift Woodside shares

AI, data centres and Woodside shares have more in common than you might think.

| More on:
A man sits in casual clothes in front of a computer amid graphic images of data superimposed on the image, as though he is engaged in IT or hacking activities.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

When you think of Woodside Energy Group Ltd (ASX: WDS) shares, data centres probably aren't the first thing that springs to mind.

But the S&P/ASX 200 Index (ASX: XJO) oil and gas stock is eyeing the booming growth of data centres, and the booming growth in energy demand they're likely to spawn.

As you're likely aware, the artificial intelligence (AI) revolution is heating up to meteoric speed.

This is likely to present a host of positives and negatives for humanity over the decade ahead.

One of the challenges is providing the energy all this new computing power requires. Particularly in a world intent on reaching net zero emissions by 2050.

You see, not only will the rapid advancement of AI see more data centres constructed. These AI enabled data centres also use roughly 10 times as much energy as traditional facilities.

Enter Woodside shares.

How Woodside shares could power your AI co-pilot

As The Australian Financial Review reported, Woodside CEO Meg O'Neill has been discussing the potential for "a liquid hydrogen value chain" with a several data centre operators in Singapore.

The island nation's government has stipulated that data centres must secure their own sustainable energy sources.

Back in March, O'Neill was championing the company's since rejected Climate Transition Action Plan (CTAP) as a potential boon for Woodside shares.

"I firmly believe Woodside is built to thrive through the energy transition and our Climate Transition Action Plan shows how we plan to achieve this," she said.

Indeed, the report released to the ASX contains the word hydrogen 18 times, with Woodside noting its intentions to leverage "infrastructure to monetise undeveloped gas, including optionality for hydrogen".

The company also revealed plans for commercial scale renewable hydrogen produced from electrolysis.

Now, CTAP is headed back to the drawing board after shareholders voted it down in late April.

O'Neill was clearly frustrated by the result. She commented:

The world wants reliable energy, they want cheap energy, they want green energy, and they want all of those three things tomorrow. And the pathway to get from where we are today to where the world would like to be is a pathway that is going to take time.

But Woodside shares could still become more closely linked with hydrogen.

And data centres could help pave the way.

Addressing the data centre operators she's been speaking with in Singapore earlier this week, O'Neill said:

With that kind of customer, we feel like we have an opportunity to work with them to find a solution that will meet their needs and allow us to make these investments in low carbon fuels.

Should you invest $1,000 in Collins Foods Limited right now?

Before you buy Collins Foods Limited shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Collins Foods Limited wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Energy Shares

A man in his 30s holds his laptop and operates it with his other hand as he has a look of pleasant surprise on his face as though he is learning something new or finding hidden value in something on the screen.
Share Gainers

Boss Energy shares have rocketed 90% in a month. Here's why

The massive rally in Boss Energy shares will be painful to the host of short sellers betting against the uranium…

Read more »

Oil worker using a smartphone in front of an oil rig.
Energy Shares

ASX 200 energy shares plunge on shock OPEC move

ASX 200 energy shares like Woodside and Santos are tumbling on Monday. Let’s find out why.

Read more »

Female oil worker in front of a pumpjack.
Energy Shares

Should you buy Woodside shares in May?

Is this energy giant a good investment right now?

Read more »

Hand holding out coal in front of a coal mine.
Energy Shares

Down 20% this year, are Whitehaven Coal shares a buy, hold or sell according to Macquarie?

Here’s what’s in store for this Australian independent coal producer.

Read more »

Rocket powering up and symbolising a rising share price.
Energy Shares

Guess which ASX uranium stock could rocket 45%

Big returns could be on offer from this stock. Let's see what Bell Potter is saying.

Read more »

A miner stands in front of an excavator at a mine site.
Energy Shares

3 ASX 200 uranium shares soaring 10%-plus today

What has got investors excited today?

Read more »

An oil worker in front of a pumpjack using a tablet PC.
Energy Shares

Woodside shares higher on 'game-changer' news

Let's see what the energy giant has announced on Tuesday.

Read more »

A Paladin Energy miner wearing a hard hat and protective gear stands in front of a large mining truck and smiles to the camera.
Energy Shares

Paladin Energy shares have surged 32% in 2 days. Macquarie says that's the tip of the iceberg

After a tough year, the future is looking brighter for Paladin Energy shares.

Read more »