Talen Energy: The Street Chases AI Chips, I'm Buying The Power Behind Them

Agar Capital
435 Followers

Summary

  • Talen Energy is transforming from a traditional utility into a critical AI infrastructure provider, with strong positioning in the PJM market and long-term Amazon contracts.
  • Recent acquisitions of gas-fired plants and an expanded AWS deal drive significant cash flow growth, making Talen a unique, scalable energy partner for data centers.
  • Despite risks around leverage, refinancing, and regulatory exposure, Talen's forward valuation is attractive, with FCF yield near 9% and substantial upside potential.
  • The market undervalues Talen's AI-linked growth, buyback program, and strategic assets—offering a compelling risk/reward profile; I rate it a Strong Buy.
camini raffineria petrolchimica industria petrolifera

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Investment Thesis

Artificial intelligence is creating a new economy, but few are asking the question "Where will all the energy to power it come from?"

During the gold rush (of the 1800s), the people who really got rich were those who sold

This article was written by

435 Followers
Hi there, and welcome to my profile.I’m a finance professional with over a decade of experience across global markets, with a deep focus on macroeconomic analysis, portfolio management, and equity research. I currently serve as a Senior Analyst at a European asset management firm, where I lead multi-asset strategies and manage equity portfolios. My approach combines top-down macro insights with bottom-up stock selection, with particular attention to economic cycles, monetary policy, and systemic risks.While I specialize in growth stocks, I bring a broad perspective across all equity styles. My research is grounded in fundamentals and supported by daily use of Bloomberg Terminal, advanced Excel models, and quantitative tools for valuation, risk monitoring, and sector analysis.On Seeking Alpha, my goal is to share high-conviction ideas, often focusing on undercovered names, contrarian opportunities, and the geopolitical and macro forces that shape capital flows. I write with both retail and institutional investors in mind—striving to deliver analysis that is rigorous, strategic, and actionable.I believe in transparency, clarity, and continuous learning. In a world of noise, I aim to provide signal.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of TLN either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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