Talen Energy Corporation (TLN): A Bull Case Theory

We came across a bullish thesis on Talen Energy Corporation on FJ Research’s Substack. In this article, we will summarize the bulls’ thesis on TLN. Talen Energy Corporation's share was trading at $394.27 as of November 28th. TLN’s trailing and forward P/E were 82.66 and 20.70 respectively according to Yahoo Finance.

Talen Energy Corporation, an independent power producer and infrastructure company, produces and sells electricity, capacity, and ancillary services into wholesale power markets in the United States. TLN represents a rare case where a structural transformation is visible before it becomes consensus. Although it appears to be a conventional Pennsylvania-based utility emerging from bankruptcy, the company now controls one of the most strategically important asset combinations in the modern economy.

A major U.S. nuclear power plant directly linked to a scalable data center campus designed to meet surging AI-driven electricity demand. As artificial intelligence accelerates power consumption across the country, data centers increasingly require reliable, carbon-free baseload energy that intermittent renewables and transitional natural gas cannot provide.

Nuclear power is the only technology capable of delivering this at scale, and Talen’s Susquehanna plant, paired with its Cumulus Data Campus and private transmission line, solves the grid-access bottleneck that is delaying data center expansion nationwide. Following its 2022 restructuring, Talen has shed legacy coal assets, repaired its balance sheet, and reoriented capital toward high-return energy-compute infrastructure, yet the market still values it like a traditional power producer. Its shareholder base—led by Rubric Capital, Vanguard, MFN Partners, and RIT Capital Partners—reflects long-term conviction rather than speculative trading.

With the first 48 MW data center shell completed and capable of scaling to over 1 GW, a single hyperscale lease could reclassify Talen from a low-multiple utility to a high-multiple digital infrastructure platform. The company’s $1 billion EBITDA base, manageable leverage, and substantial optionality around Cumulus Data create a powerful asymmetry: limited downside supported by nuclear cash flows and transformative upside if compute tenants materialize. As power scarcity intensifies, Talen’s integrated energy-to-compute model positions it to become a foundational player in the AI economy, with a rerating that could materially exceed current expectations.

Previously we covered a bullish thesis on Vistra Corp. (VST) by desperate-pleasures in March 2025, which highlighted its nuclear capacity, strong cash flows, and leverage to rising AI-driven electricity demand. The company’s stock price has appreciated approximately by 40.97% since our coverage. This is because the thesis played out as power demand strengthened. The thesis still stands as Vistra remains well-positioned. FJ Research shares a similar view but emphasizes Talen’s nuclear-adjacent data center model.

Talen Energy Corporation is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 83 hedge fund portfolios held TLN at the end of the second quarter which was 80 in the previous quarter. While we acknowledge the potential of TLN as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.