Key Highlights
- SEI stock advanced 4.2% Tuesday following the announcement of another data center power agreement
- The agreement provides 600+ megawatts of power capacity to a major technology company over a 10-year period
- First-quarter earnings reached 32 cents per share, falling one cent short of analyst projections
- First-quarter revenue hit $196.2 million, surpassing forecasts of $183.4 million and marking a 55% annual increase
- Morgan Stanley reaffirmed its Overweight rating with an $81 price objective for SEI
Shares of Solaris Energy Infrastructure rallied Tuesday following the company’s disclosure of a third extended power agreement with a leading technology firm, overshadowing a marginal quarterly earnings shortfall.
Solaris Energy Infrastructure, Inc., SEI
The stock reached an intraday peak of $81.24 before settling 4.2% higher at $73.66. Year-to-date, SEI has surged 54%, with April alone accounting for 25% of those gains.
Executed on April 24, the agreement will enable Solaris to supply over 600 megawatts of power capacity to a subsidiary of an “investment-grade, global technology company.” The initial term spans 10 years, featuring an optional five-year extension.
Solaris anticipates commencing power deployments during late 2026 and ramping up operations through 2028.
Regarding financial performance, first-quarter earnings registered 32 cents per share — representing growth from 14 cents year-over-year but missing consensus estimates by one cent. Revenue performance proved stronger, climbing 55% annually to $196.2 million, exceeding Wall Street’s $183.4 million projection.
Transition from Traditional Energy to Tech Infrastructure
Solaris entered the data center power sector in 2024 through its $323 million acquisition of Mobile Energy Rentals. This strategic purchase provided the company with mobile gas turbine technology and distributed power generation capabilities.
Currently, Solaris delivers primary power solutions, equipment sourcing, and engineering services directly to data center operators — eliminating reliance on traditional utility grids. Co-CEO Bill Zartler explained during Tuesday’s earnings conference that prolonged grid interconnection timelines are driving customers toward behind-the-meter power alternatives, positioning Solaris favorably.
“The broader power market continues to reinforce and support our strategy,” Zartler stated.
He further mentioned ongoing negotiations with both current and prospective customers regarding additional projects.
Analyst Support Remains Firm
Morgan Stanley analyst David Arcaro indicated the newest contract “strengthens” the firm’s Overweight stance and $81 price target for SEI.
Arcaro calculates that the 600-megawatt agreement — utilizing a $300 per kilowatt assumption — could generate approximately $450 million in value, translating to roughly $5 per share. He anticipates Solaris’s valuation multiple will expand as long-term contract visibility strengthens.
However, Arcaro cautioned that profit margins on extended contracts might be compressed, and conservative third-quarter guidance could signal uncertainty around new contract implementation timelines.
Concerning forward guidance, Solaris elevated its second-quarter adjusted EBITDA forecast to $83–$93 million from the previous $76–$84 million range. Third-quarter adjusted EBITDA guidance was established at $80–$95 million — with the midpoint trailing Wall Street’s $100.5 million consensus.
Management explained the tempered third-quarter outlook stems from evolving dynamics within a joint venture initiative and new equipment deliveries planned for the latter half of 2026.
Solaris currently trades at a P/E ratio of 99.48x, indicating substantial growth expectations embedded in the valuation. The company’s GF Score stands at 77/100, featuring a growth ranking of 9/10 but a financial strength assessment of only 5/10.
Insider transactions over the trailing twelve months reveal 11 sales versus 7 purchases — a mixed signal warranting continued monitoring.
