Up 260% so far this year, Ceres Power Holdings (LSE: CWR) is in contention for the best UK growth stock of 2026. And a 15% jump early Friday (22 May) helped.

The only slight problem is, there’s no obvious reason for the morning spike. We have no results update, no new announcements from the company… nothing concrete at all. So what’s happening?

Potential upgrade

The jump appears to be based on developing rumours. Investors chatting on forums are talking about a potential price target upgrade from UBS. At a mooted 970p, it would suggest a 46% increase from Thursday’s close.

Shares in South Korea’s Doosan Fuel Cell are also on the up, driven by strong orders and optimism over the company’s solid oxide fuel cell systems aimed at AI data centres. The connection? Doosan is a manufacturing licensee for Ceres technology.

How does that old saying go — buy on the rumour, sell on the news? Hmm, that’s for short-term trading, not long-term investing. So it’s out of the window for me. But it does mean I’ll be keeping my eyes peeled for news in the coming days and weeks.

AI confusion abounds

To divert from my core subject for a minute. A strange thing happened in the US on Wednesday. AI chip leader Nvidia posted another standout quarter. Revenue climbed 85% year on year, with adjusted earnings per share up a storming 140%. But the share price declined over the week. It’s still on a forward price-to-earnings (P/E) multiple of only 24 — dropping to just 15 on 2029 forecasts.

So the world’s hottest AI stock, up more than 1,300% in five years, can be bought at a valuation around the average for our modest little FTSE 100. The world might have gone mad.

What do we take from this? One thing, maybe, is that AI-related share prices bear little connection to traditional valuation metrics. That’s perhaps just as well for Ceres Power shareholders.

A UK route into AI?

The thing is, Ceres is loss-making right now. Analysts project a profit by 2028, but only a small one. It would put the P/E at a scary 640. Now, that can easily happen in the year a growth stock becomes profitable. And the predicted 2029 multiple, when we have it, might come in much closer to earth.

But it makes it hard for investors to put any kind of rational value on Ceres shares at the moment. At least CEO Phil Caldwell was able to report concrete progress in March…

In 2025 our first partner achieved scaled production, unlocking Ceres’ first royalties, a significant milestone for the business. We sharpened our commercial focus to address rising demands for power generation and advanced our solid oxide technology toward becoming the industry standard, setting a strong foundation for a successful 2026.

— FY 2025 results

Buy, or avoid?

Ceres doesn’t fit my investing profile these days — I see jam-tomorrow growth stocks as something for a younger generation. But risk-takers might do well to consider putting a little bit into the shares to get a foot in the AI door.

Should you invest £5,000 in Ceres Power Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Ceres Power Plc made the list?

Alan Oscroft does not hold any positions in the companies mentioned.