Is AES a good stock to buy? We came across a bullish thesis on The AES Corporation on The Mispricing Desk’s Substack. In this article, we will summarize the bulls’ thesis on AES. The AES Corporation’s share was trading at $14.71 as of June 8th. AES’s trailing and forward P/E were 7.64 and 6.38 respectively according to Yahoo Finance.
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The AES Corporation, together with its subsidiaries, operates as a power generation and utility company. AES is positioned as a compelling merger-arbitrage opportunity following its agreement to be acquired by a consortium led by Global Infrastructure Partners and EQT in an all-cash transaction at $15.00 per share. The deal highlights a clear strategic reality: AES’s standalone trajectory beyond 2027 would likely require either a reduction in its dividend or meaningful new equity issuance to fund its growth pipeline, making the private transaction an attractive outcome for shareholders seeking certainty and balance sheet simplification.
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The market spread reflects residual uncertainty around shareholder approval and regulatory timing, yet the underlying deal rationale remains strong, supported by a disciplined buyer group and a clear capital structure reset upon closing. AES’s business mix across digital infrastructure, retail power solutions, and long-duration contracted assets provides stable cash flows, but also necessitates sustained capital investment that is better supported under private ownership.
The proposed acquisition effectively de-risks AES’s funding model while crystallizing value at a level that already incorporates a premium to unaffected trading levels. Importantly, the downside case of deal failure would reintroduce capital intensity concerns and potential dividend pressure, reinforcing the relative attractiveness of the cash consideration.
Regulatory approvals and shareholder voting remain the key milestones, but the process is progressing through expected filings and jurisdictional reviews without signs of structural impediment. Overall, AES represents a clean, cash-capped upside profile where the spread offers incremental return on a highly probable outcome, while the strategic logic of the transaction supports eventual convergence to deal value as approvals advance.
Previously, we covered a bullish thesis on Constellation Energy Corporation (CEG) by jackandjillonthehill in March 2025, highlighting nuclear-driven margin expansion, rising electricity prices, and superior ROE versus traditional utilities. CEG’s stock price has appreciated by approximately 14.70% since our coverage. The Mispricing Desk shares a similar view on utilities but emphasizes AES Corporation (AES), focusing instead on merger-arbitrage upside, capital structure simplification, and regulatory-driven value realization.
The AES Corporation is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 72 hedge fund portfolios held AES at the end of the first quarter which was 56 in the previous quarter. While we acknowledge the risk and potential of AES as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than AES and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
