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 $47.89 as of November 28th. SEI’s trailing P/E was 50.95 according to Yahoo Finance.

Solaris Energy Infrastructure (SEI), formerly Solaris Oilfield Infrastructure, has transformed from a niche oilfield logistics company into a rapidly scaling distributed power provider following its 2024 acquisition of Mobile Energy Rentals (MER). Originally focused on all-electric systems for handling sand, fluids, and chemicals at wellsites, Solaris provided steady cash flow through its Logistics Solutions segment but remained tied to cyclical oil and gas activity.

The MER acquisition, a $200M deal combining cash and equity, launched SEI’s Power Solutions segment, giving the company a foothold in distributed generation with mobile, natural-gas-powered turbines contracted to energy, industrial, and hyperscale AI data centers.

This segment offers higher-margin, long-duration contracts and has scaled rapidly, generating $77.6M in EBITDA in the first half of 2025, nearly 40% of the acquisition price within nine months. By mid-2025, SEI had 1,700 MW contracted, with xAI as its anchor customer representing ~67% of the backlog, supported through a joint venture structure that shares capital and aligns incentives. SEI’s 2025 valuation is attractive at ~12x forward EBITDA, falling to ~4.5x by 2027 if management hits targets of $575–600M in annual EBITDA and $400M in free cash flow, highlighting a potential re-rating relative to peers.

However, significant risks remain: extreme customer concentration on xAI, regulatory and environmental challenges, high capital intensity, and concerns over management credibility and accounting practices. While the MER acquisition has created a structurally appealing business with strong secular tailwinds from AI and electrification, SEI’s execution and governance risks introduce material uncertainty. For disciplined investors, the asymmetric valuation opportunity is clear, but trust issues and dependency on a single counterparty make SEI a high-risk, high-reward proposition despite its impressive growth trajectory.

Previously we covered a bullish thesis on Solaris Energy Infrastructure, Inc. (SEI) by LiterallyAzzmilk in March 2025, which highlighted its growth from the MER acquisition, entry into distributed power, and strong financial performance. The stock has appreciated by 95.78% since coverage as the acquisition accelerated scale. The thesis still stands. M. V. Cunha shares a similar view but emphasizes Power Solutions’ rapid scaling, xAI concentration, and execution risks.

Solaris Energy Infrastructure, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 38 hedge fund portfolios held SEI at the end of the second quarter which was 31 in the previous quarter. While we acknowledge the potential of SEI 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.