Is TAC a good stock to buy? We came across a bullish thesis on TransAlta Corporation on Valueinvestorsclub.com by jd5318. In this article, we will summarize the bulls’ thesis on TAC. TransAlta Corporation’s share was trading at $13.57 as of May 25th. TAC’s trailing and forward P/E were 708.69 and 133.33 respectively according to Yahoo Finance.
TransAlta Corporation is Alberta’s largest power generator, with an equity value of roughly C$5 billion, trading at over 5.5x forward free cash flow and closer to ~11x on consensus implied trough expectations, positioning it at the low end of North American power peers. The company operates an integrated devco-propco model across Canada and the U.S., with a balanced fleet split between renewables and natural gas.
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While the market currently prices TransAlta as a cyclical Alberta merchant power producer facing oversupply from new gas capacity and weaker 2026–2028 pricing, this view assumes a static business model and underappreciates structural changes underway. The acquisition of Heartland consolidates a significant portion of Alberta’s peaking fleet, enabling more rational dispatch and improved capture of scarcity-hour pricing in an increasingly volatile renewables-heavy grid.
As reliability becomes more valuable, TransAlta’s controlled peaker portfolio stands to benefit disproportionately from tightening supply-demand conditions and potential market design changes that reward dispatchable capacity. In parallel, the company is well positioned for emerging AI-driven data center demand in Alberta, where hyperscale workloads require gigawatt-scale power access, fast interconnection, land, permitting, and increasingly clean-energy integration.
TransAlta’s grid-connected sites, development optionality, and renewable footprint align well with these requirements, supported by early strategic steps including its Brookfield partnership announcement. While risks remain around timing of supply absorption, current valuation around $18 per share suggests investors are already compensated to wait. With improving scarcity economics, potential AI-driven load growth, and portfolio consolidation benefits, TransAlta offers meaningful rerating potential and a more resilient earnings profile than the market currently reflects.
Previously, we covered a bullish thesis on Vistra Corp. (VST) by desperate-pleasures in March 2025, which highlighted AI-driven electricity demand, nuclear and gas generation exposure, and strong capital return programs including buybacks and insider buying. VST’s stock price has appreciated by approximately 23.17% since our coverage. jd5318 shares a similar view but emphasizes TransAlta Corporation’s Alberta peaker consolidation and AI-driven data center demand shaping scarcity pricing and rerating potential.
TransAlta Corporation is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 31 hedge fund portfolios held TAC at the end of the fourth quarter which was 31 in the previous quarter. While we acknowledge the risk and potential of TAC 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 TAC and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
