What happened

Renewable energy stock Gevo (GEVO 0.14%) is absolutely crushing the market today, up 39.7% as of 1:05 p.m. EDT. Gevo just found an investor in an oil and gas giant, and the market can't seem to control its excitement.

So what

Gevo is an early-stage renewable energy company that aims to produce low-carbon gasoline and jet fuel from feedstocks like corn.

This morning, it announced a collaboration with Chevron U.S.A, a subsidiary of oil giant Chevron (CVX -0.87%), to jointly invest in facilities that'll produce sustainable aviation fuel from inedible corn, as well as protein and corn oil as byproducts. In exchange for its investments, Chevron will have the right to purchase 150 million gallons of fuel per year.

A person looking shockingly at a laptop screen.

Image source: Getty Images.

Chevron operates in both the upstream and downstream oil and gas sectors, and sells refined products, primarily jet fuel and gasoline, through its downstream operations. In a big move, the company recently established a separate business unit to fast-track decarbonization and has been on a collaboration spree in recent weeks. On Sept. 7, Chevron announced plans to produce a test batch of sustainable aviation fuel for Delta Air Lines (DAL -0.46%). Its collaboration with Gevo looks to be related to those plans.

For Gevo, Chevron's interest in its products suggests more and more companies see promise in its technology. Several companies, including Delta, have already signed up for Gevo's ambitious Net-Zero project, which aims to produce net-zero emission liquid hydrocarbons from renewable sources of energy.

Now what

Before today's huge move, Gevo shares were declining precipitously since hitting 52-week highs of $15.57 earlier this year, losing almost 70% in value since. Investor interest in the once red-hot stock dried up in the absence of any new collaborations or contracts this year. The entry of a big name like Chevron was enough to power the stock's own flight.