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Solaris Rides the AI Boom as Risks Mount

By Peter Frank. Originally Published: 10/15/2026.

A few years ago, Solaris Energy Infrastructure (NYSE: SEI) was best known for managing sand at oil wells.

Today, the company is building private power plants for data centers, and Wall Street is treating it as an AI infrastructure play. The stock has climbed sharply this year, and earnings guidance keeps rising. Analysts now rate it a solid Buy.

For investors, the harder question is whether a stock priced at such a rich multiple has left much margin for error.

Long-term contracts and rapidly growing cash earnings are real positives, but so are heavy spending, a rising debt load and sensitivity to interest rates.

Solaris Reports Strong Growth

To understand the impact of Solaris’ shifting business, its second-quarter results tell the story. Reporting Aug. 5, the company said revenue was $219.4 million, compared with $149.3 million a year earlier. Net income attributable to shareholders was $20 million, or 26 cents per share, compared with income of $12 million, or 30 cents per share, in the year-ago period.

On an adjusted basis, EBITDA came in at $108.3 million, up from $60.6 million. Adjusted earnings of 39 cents per share beat analysts’ expectation of 31 cents.

The power segment, which accounts for 72% of revenue, was the standout, with sales more than doubling from a year ago.

Long-Term Contracts Drive Earnings Guidance

That growth was built on contracts. Solaris expanded three long-term agreements that it says will add more than $100 million in expected annual adjusted EBITDA. One is a turnkey power plant of about 660 megawatts for AI workloads, with a term of up to 18 years.

Then came a Sept. 8 guidance bump. Solaris raised its third-quarter adjusted EBITDA forecast to $110 million to $130 million, an increase of 23% based on the midpoint.

The company also lifted its fourth-quarter forecast by 48%, to between $145 million and $180 million, and guided for first-quarter 2027 adjusted EBITDA of $200 million to $240 million. Management credited stronger power services and better-than-expected performance from acquired businesses.

Solaris Expands Power Capacity and Services

Capacity also continues to expand. In March, Solaris announced 900 additional megawatts of power generation capacity, expected to become available between 2026 and 2029.

In addition, it has taken an early equity stake in a small modular reactor technology company and bought Global Energy Services Alliance, a power-generation service provider. Those moves broaden what Solaris can sell to each customer and position it as more than an equipment lessor.

The deal flow has also been busy. On Sept. 1, Solaris bought Omega Foundation Services, a heavy-civil construction firm, for a mix of cash, assumed debt and stock. On Sept. 22, it priced an upsized $1.25 billion offering of senior notes due in 2032 to fund growth.

Analysts See More Upside Despite High Valuation

Analysts are decidedly bullish. The consensus rating is Buy, with 11 of the 12 analysts following the stock recommending the shares. Of those, one lists it as a Strong Buy, while one recommends Hold. Six analysts have boosted their price targets since earnings were announced.

With the stock already up roughly 53% this year, the average 12-month price target implies an additional 34% increase. The highest price target is $120 per share, while the lowest is $60.

Valuation is where the debate gets interesting. Solaris trades at a multiple you would expect to see on a growth stock, not an oilfield services business. Its forward price-to-earnings ratio is approximately 56. And this is not one of the dividend stocks to build income around, with a yield near 0.7%.

Heavy Spending and Rising Debt Pose Risks

Despite the impressive results and contracts, investors should be aware that earnings have not kept pace with EBITDA.

GAAP diluted earnings per Class A share were 26 cents in the second quarter, below the 30 cents reported a year earlier, even as adjusted EBITDA rose 79%. The reason is that building power plants is expensive, and second-quarter capital spending was more than four times adjusted EBITDA.

The balance sheet also bears watching. As of June 30, the company carried nearly $2.5 billion in debt and convertible notes against far less cash. That is manageable while contracts deliver, but it leaves little room for delays in equipment delivery, commissioning or customer acceptance—all of which the company lists as risks.

Growth Prospects Remain Strong

With all that in mind, Solaris has one of the more compelling growth narratives in energy, with long-term contracts, rapidly rising EBITDA guidance and a deepening service offering.

The stock, however, already reflects much of the good news. Cash flow is negative after heavy investment, and leverage is climbing.

Solaris might be better suited to patient, risk-tolerant investors who can withstand volatility. The third-quarter report, expected in early November, could provide an important update on the guided EBITDA ramp.

For investors who want exposure to AI power demand with a more traditional energy foundation, careful positioning as future results unfold could be the smart way to participate.