Solaris Energy Infrastructure, Inc. (SEI): A Bull Case Theory 

We came across a bullish thesis on Solaris Energy Infrastructure, Inc. on MVC Investing’s Substack by M. V. Cunha. In this article, we will summarize the bulls’ thesis on SEI. Solaris Energy Infrastructure, Inc.’s share was trading at $53.77 as of January 28th. SEI’s trailing P/E was 57.34 according to Yahoo Finance.

Solaris Energy Infrastructure (SEI), formerly Solaris Oilfield Infrastructure, has transformed from a niche oilfield logistics player into a rapidly scaling distributed power provider. The company initially carved a technological edge in hydraulic fracturing by designing all-electric, automated systems for handling proppants and fluids, bundling hardware with logistics services and software solutions. This legacy Logistics segment remains cash-generative but cyclical, tied to drilling and completion activity.

The strategic pivot came in H2 2024 with the $200M acquisition of Mobile Energy Rentals (MER), a provider of mobile natural-gas-powered turbines, marking the launch of SEI’s Power Solutions segment and a rebrand to Solaris Energy Infrastructure. MER brought 153 MW of contracted mobile turbine capacity, projected to expand to 478 MW by Q3 2025, and access to hyperscale AI data centers, most notably xAI, which represents ~67% of SEI’s 1,700 MW contracted backlog. Power Solutions now drives SEI’s growth, delivering high-margin, recurring revenue through medium- to long-term turbine leases, with EBITDA margins above 60% and significant free cash flow potential.

By 2027, SEI targets $575–600M in EBITDA, trading at only ~4.5x forward EBITDA, far below peers, implying a compelling upside if execution remains on track. However, the investment carries substantial risks: extreme customer concentration with xAI, environmental and permitting challenges, high capital intensity, and management credibility concerns, including past controversies surrounding MER’s founders. Accounting practices and margin sustainability further complicate the picture. While SEI’s transformation is impressive and valuation attractive, these structural and governance risks make the opportunity asymmetric—high upside but material downside—underscoring the importance of discipline and trust in management.

Previously, we covered a bullish thesis on Solaris Energy Infrastructure, Inc. (SEI) by LiterallyAzzmilk in March 2025, which highlighted the company’s financial strength, MER acquisition, and expansion into distributed power. SEI’s stock price has appreciated by approximately 119.82% since our coverage as the market recognized its growth potential. M. V. Cunha shares a similar perspective but emphasizes Power Solutions, xAI contracts, and associated concentration and governance risks.

Solaris Energy Infrastructure, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 50 hedge fund portfolios held SEI at the end of the third quarter which was 38 in the previous quarter. While we acknowledge the risk and potential of SEI 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 SEI and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.