Energy Transfer (ET)
Price target: Premium members only
It’s not just technology companies benefitting from the AI boom, energy companies of all kinds are also reaping the benefits. The AI data center boom demands 24/7 reliable power, leading utilities to turn to natural gas to supply it. New gas fired power plants are being proposed specifically for AI workloads, creating structural, not seasonal demand growth. So while natural gas demand has historically by seasonal (higher in the winter), the globe’s electrification is changing its status.
What Energy Transfer Does:
Energy Transfer is one of the largest and most diversified midstream energy companies in the North America with approximately 140,000 miles of pipelines transporting oil, natural gas, and natural gas liquids. They don’t produce it, they move it, store it, and process it for fees. The company generated $82.7 billion last year doing this, and is expected to rapidly increase revenue in the coming years as it positions itself as a major infrastructure provider for the AI boom. It already has multiple long term agreements with Oracle and another deal with CloudBurst Data Centers.
Infrastructure Projects:
Past the AI data center demand, ET is working on key infrastructure projects like the High Brinson Pipeline Expansion, which has been described by its management as “the most profitable asset we’ve ever built”. Indeed, the company’s guidance does look rosy, making its stock’s current valuation attractive.
We first initiated coverage on $ET in November of last year. The stock has since gained more than 10% and reached out first price target. Its price to earnings ratio has moved from 13x to 15.8x, but still below the industry average, making it still attractive, especially with global energy markets trading higher.
Risks:
As with most energy stocks, $ET is subject to market price fluctuations and geopolitical tensions. Execution risks on their infrastructure projects are also present.
Please note that the stock includes risks and price targets are subject to change based on market developments and company updates. These stocks usually take time to come around and the outlook may change. Trade at your own risk.
First Solar (FSLR)
Price target: Premium members only
First Solar isn’t your typical solar play. While most of the world relies on traditional silicon based panels, they’ve built their entire business around thin-film technology. This difference gives them a vertically integrated setup, faster production cycles, and most importantly, insulation from the China heavy silicon supply chain. In a market where trade tensions and tariffs can shift the landscape overnight, that “American made” angle has quietly become one of their biggest advantages.
Macro Boost for Solar:
The macro set-up is doing a lot of the heavy lifting here. AI data centers need power at a scale we haven’t really seen before, and solar plus storage is one of the fastest ways to bring that online. We’re already holding a company that has a big piece of the globe’s battery storage solutions in our Hyper Stocks positions, now we’re adding First Solar because of their utility scale story. First Solar is not chasing residential rooftop installs, they are going for massive solar farms. And increasingly, those projects are being tied to hyperscalers like Microsoft, Amazon, and Google, all of which are racing to secure reliable energy for AI data centers.
Is the demand real? They’ve essentially sold out production capacity through the end of the decade, sitting on over 50 GW of contracted demand. The company is scaling aggressively across the U.S., with new factories coming online in Alabama and Louisiana. By late 2026, they’re targeting over 14 GW of domestic capacity, which is a massive step up and aligns directly with where demand is going.
Financials:
As for financial performance, First Solar’s unique approach and vertically integrated setup have translated into strong margins. The company generated over $5.2 billion in revenue last year, with net margins around 30%. Their balance sheet is extremely strong, with $13.3B in assets and $3.78B in liabilities, leaving with $9.54 in total equity. And finally, free cash flow improved significantly last year and is sitting around $1.2 billion.
Risk:
A shift in policy, especially around subsidies, could impact margins. There are also longer term risks around material constraints, technological competition, and execution.
Please note that the stock includes risks and price targets are subject to change based on market developments and company updates. These stocks usually take time to come around and the outlook may change. Trade at your own risk.
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Disclaimer: This article is for informational and educational purposes only and does not constitute financial advice. Investing involves risk, including the possible loss of capital. Always conduct your own research or consult with a licensed financial advisor before making investment decisions.
Hyper Stocks and its contributors may hold positions in some of the securities or assets mentioned above. These positions are subject to change without notice. Any opinions expressed reflect current views at the time of writing and are not guarantees of future performance. Past performance does not guarantee future results.