TLDR
- SEI shares advanced 4.2% Tuesday following confirmation of a third data center power agreement
- The agreement provides over 600 megawatts of capacity to a global technology company for a 10-year term
- First quarter earnings reached 32 cents per share, falling one cent short of the 33-cent analyst consensus
- First quarter revenue hit $196.2 million, surpassing the $183.4 million forecast and representing a 55% annual increase
- Morgan Stanley reaffirmed its Overweight rating with an $81 price target for SEI
Solaris Energy Infrastructure shares rallied Tuesday following the announcement of a third long-duration power agreement with a prominent technology enterprise, overshadowing a marginal earnings shortfall.
Solaris Energy Infrastructure, Inc., SEI
Shares peaked at $81.24 during Tuesday’s session before settling 4.2% higher at $73.66. Year-to-date, SEI has surged 54% in 2026, with April accounting for 25% of those gains.
The agreement, finalized on April 24, commits Solaris to delivering over 600 megawatts of power capacity to an affiliate of an investment-grade global technology corporation. The contract spans a decade with provisions for a five-year extension.
Solaris anticipates initiating power deployments toward the end of 2026, with scaling efforts continuing through 2028.
Regarding quarterly performance, Q1 results showed earnings of 32 cents per share — representing growth from 14 cents in the prior year period, though falling a penny below consensus forecasts. Revenue demonstrated stronger performance, climbing 55% year-over-year to $196.2 million, exceeding the anticipated $183.4 million.
From Oil Fields to Data Centers
Solaris entered the data center power sector in 2024 through its $323 million acquisition of Mobile Energy Rentals. This transaction provided the company with mobile gas turbine assets and on-site power generation expertise.
Currently, Solaris delivers primary power solutions, equipment procurement services, and engineering support directly to data centers — operating independently of traditional electric grids. Co-CEO Bill Zartler explained during Tuesday’s earnings conference that grid interconnection bottlenecks are driving customers toward behind-the-meter power alternatives, positioning Solaris favorably.
“The broader power market continues to reinforce and support our strategy,” Zartler said.
Zartler further disclosed that the company maintains ongoing conversations with current and prospective customers regarding additional projects.
Morgan Stanley Backs the Deal
Morgan Stanley analyst David Arcaro indicated the recent contract “strengthens” the firm’s Overweight rating and $81 price target for SEI.
Arcaro projects the 600-megawatt agreement — calculated at $300 per kilowatt — could generate approximately $450 million in value, translating to roughly $5 per share. He anticipates Solaris’s valuation multiple expanding as long-term contract visibility strengthens.
Arcaro did note potential concerns, highlighting that long-term contract margins might register lower levels, while the cautious Q3 guidance could signal uncertainty around new contract implementation timelines.
Concerning forward guidance, Solaris elevated its Q2 adjusted EBITDA projection to $83–$93 million, up from the previous $76–$84 million range. The company established Q3 adjusted EBITDA guidance at $80–$95 million — with a midpoint trailing Wall Street’s $100.5 million forecast.
Executives attributed the more modest Q3 outlook to evolving dynamics within a joint venture initiative and new equipment deliveries scheduled for the latter half of 2026.
Solaris currently trades at a P/E ratio of 99.48x, reflecting substantial growth expectations. The company holds a GF Score of 77/100, featuring a growth rank of 9/10 alongside a financial strength rating of 5/10.
Insider transaction patterns over the past year reveal 11 sales and 7 purchases — a mixed signal warranting continued monitoring.
