Timothy McCandless – The Hedge – February 14, 2026
Current Snapshot – ABSOLUTE ROCKET SHIP
- Price: $56.63 (+10.03% today)
- Previous Close: $51.47
- 52-Week Range: $14.27 – $59.80
- Currently: Just 5.3% below all-time high
- Volume: 6.24M (2.19x average) – Massive institutional interest
Performance Metrics – OFF THE CHARTS
| Timeframe | Performance | Grade |
|---|---|---|
| Week | +9.79% | A+ |
| Month | +8.86% | A+ |
| Quarter | +19.75% | A+ |
| Half Year | +106.91% | A+++ |
| YTD 2026 | +23.19% | A+++ |
| 1 Year | +107.66% | A+++ |
| 3 Year | +425.32% | EPIC |
| 5 Year | +365.32% | EPIC |
Analysis: This is one of the most explosive growth stories in energy. A 107% gain in one year and 425% over three years puts SEI in rarefied air. The stock has essentially quadrupled the S&P 500’s performance.
Valuation Snapshot – GROWTH AT ANY PRICE
| Metric | Value | Assessment |
|---|---|---|
| P/E Ratio | 62.19 | Extremely high |
| Forward P/E | 36.36 | Still expensive but improving |
| PEG Ratio | 0.43 | SCREAMING BUY |
| P/S Ratio | 7.20 | Premium valuation |
| EV/EBITDA | 24.19 | High but justified by growth |
CRITICAL INSIGHT: The PEG of 0.43 is the key metric here. With EPS growth of 84.3% projected over next 5 years, this stock is CHEAP on a growth-adjusted basis despite the high P/E.
Earnings Explosion
Historic Growth:
- EPS TTM: $0.91
- EPS Next Year: $1.56 (+40.29% growth)
- EPS Next 5Y: 84.30% annually (INSANE)
- EPS Q/Q: +757.11% (Q4 over Q3)
- Sales Y/Y: +92.33% (nearly doubled)
- Sales Q/Q: +122.40% (more than doubled)
Recent Earnings:
- Q3 2025 (Nov 3): Beat estimates, record revenue
- Q2 2025 (Jul 23): Beat estimates, raised guidance
- Q1 2025 (Apr 28): Beat estimates, announced JV and power contracts
Pattern: Three consecutive earnings beats with guidance raises. This is EXECUTION.
The AI Data Center Power Play – THE THESIS
Why This Stock is Exploding:
The Problem: AI data centers need MASSIVE amounts of power The Solution: Solaris provides mobile power generation and infrastructure The Opportunity: AI’s “insatiable need for power” (Fortune, Oct 23, 2025)
Key Headlines:
- “AI’s insatiable need for power is driving an unexpected boom in oil-fracking company stocks” (Fortune)
- “AI Data Center Opportunities Underpin Morgan Stanley’s Bullish Stance” (IBD, Dec 2)
- “This Tech Play Smokes Google, Nvidia, And All Mag 7 Stocks Year To Date” (IBD, Dec 17)
The Infrastructure Play:
SEI is the “picks and shovels” of the AI boom:
- While everyone invests in AI chips (NVDA), SEI provides the POWER infrastructure
- Data centers can’t run without electricity
- Traditional grid can’t keep up with AI demand
- Solaris provides mobile power solutions – rapid deployment
Recent Catalysts – MASSIVE NEWS FLOW
Feb 13, 2026 – NEW CONTRACT (ALL-TIME HIGH)
- “Solaris Energy Climbs to All-Time High on Newly Bagged Deal”
- Shares jump 12% overnight
- Stock at $56.63, just 5% from $59.80 all-time high
Strategic Moves (Past 6 Months):
1. Convertible Notes Offerings:
- Oct 2025: $650M convertible notes (upsized from smaller offering)
- May 2025: $135M convertible notes (upsized)
- Purpose: Funding aggressive expansion into AI data center power
2. Acquisitions:
- Aug 18, 2025: Acquired HVMVLV – specialty power control and distribution
- Expanding beyond just mobile generators to complete power solutions
3. Leadership Addition:
- Oct 15, 2025: Amanda Brock joins as Co-CEO
- Dual CEO structure for scaling operations
4. Dual NYSE Listing:
- Jul 30, 2025: Dual listing on NYSE Texas
- Expanding visibility and institutional access
5. Joint Ventures:
- Apr 28, 2025: Signing of joint venture for power solutions
- Fleet growth announcements
Analyst Consensus – UNIVERSAL BUY
Recent Initiations (All Bullish):
- Dec 2, 2025: Morgan Stanley Overweight (PT $68) – AI data centers
- Jun 13, 2025: Raymond James Outperform (PT $39) – crushed it!
- Jun 6, 2025: Barclays Overweight (PT $42) – crushed it!
- May 22, 2025: Citigroup Buy (PT $32) – crushed it!
- May 14, 2025: Vertical Research Buy (PT $36) – crushed it!
- Apr 22, 2025: Northland Outperform (PT $37) – crushed it!
- Feb 25, 2025: Janney Buy (PT $57) – at target!
Current Targets:
- Consensus Target: $66.27
- Upside from current: +17.0%
- Recommendation: 1.17 (STRONG BUY – nearly unanimous)
Jan 8, 2026: Price target raised to $70 by analyst
Technical Analysis
Momentum Indicators:
- RSI (14): 57.02 – Healthy (not overbought)
- SMA20: +5.10% (short-term uptrend)
- SMA50: +10.68% (medium-term strength)
- SMA200: +45.57% (MASSIVE long-term trend)
- Beta: 1.14 (slightly more volatile than market)
- Relative Volume: 2.19 – DOUBLE normal volume
Chart Pattern:
- Base-on-base pattern forming (IBD, Jan 9) – bullish continuation
- Breaking out to new highs on volume
- Each consolidation leads to new leg higher
Risk Factors – THE REALITY CHECK
MAJOR CONCERNS:
1. Short Interest – 33.97% of Float
- 12.59M shares short
- Short Ratio: 4.42 days to cover
- This is MASSIVE short interest – either:
- a) Short squeeze fuel (bullish)
- b) Smart money betting against it (bearish)
2. Valuation is EXTREME:
- P/E of 62 is stratospheric
- P/S of 7.2 is nosebleed territory
- Trading on future growth, not current earnings
3. Insider Selling:
- Insider Trans: -11.71% (significant selling)
- Insider Own: 24.05% (still substantial but declining)
- Why are insiders selling at highs?
4. Institutional Ownership:
- 122.77% – Over 100% (includes derivatives/double counting)
- This can be dangerous – crowded trade
5. Legal Issues:
- Multiple securities lawsuits filed (May 2025)
- “Levi & Korsinsky” class action notices
- These are often frivolous but create uncertainty
6. Payout Ratio:
- 95.01% – Paying out almost all earnings as dividends
- Leaves little room for error
- Dividend of only 0.85% anyway – not buying for yield
7. Employee Count:
- Only 364 employees for $538M in sales
- Highly leveraged business model
- Execution risk if demand accelerates
8. Upcoming Earnings:
- Feb 24 AMC (After Market Close) – Next earnings
- Very high expectations after three beats
- Any miss could trigger 20%+ selloff
The Bull Case (60% Probability)
Why This Could Keep Running:
- AI Data Center Build-Out is REAL – Multi-year tailwind
- Proven Execution – Three consecutive beats
- First Mover Advantage – Dominates mobile power for data centers
- Analyst Upgrades – Universal buy ratings, targets at $66-70
- Revenue Growth – 92% Y/Y is sustainable in AI boom
- PEG Ratio – 0.43 suggests undervalued vs growth rate
- Short Squeeze Potential – 34% short interest is powder keg
- Institutional Momentum – 2.19x volume shows accumulation
Price Targets:
- Bull Case: $75-80 by year-end 2026
- Base Case: $66-70 (analyst consensus)
- Conservative: $60 (10% from current)
The Bear Case (40% Probability)
Why This Could Crash:
- Valuation is INSANE – P/E of 62 with no margin for error
- Massive Short Interest – 34% suggests smart money is bearish
- Insider Selling – Why sell at all-time highs?
- Legal Overhang – Securities lawsuits create uncertainty
- Earnings Miss Risk – Feb 24 earnings could disappoint
- AI Hype Cycle – If AI spending slows, SEI crashes 40%+
- One Trick Pony – Dependent on data center build-out continuing
- Mean Reversion – Up 425% in 3 years is unsustainable
Downside Scenarios:
- Bear Case: Back to $35-40 (30-40% drop)
- Crash Scenario: $25-30 if AI bubble pops (50%+ drop)
My Recommendation: SWING TRADE ONLY
Rating: STRONG BUY for Traders / AVOID for Investors
This is NOT a buy-and-hold stock. This is a MOMENTUM TRADE.
Trading Strategy
For Aggressive Traders (ONLY if you can handle volatility):
The Setup:
- Stock just hit all-time high on new contract news
- Volume surging (2.19x average)
- RSI at 57 (room to run to 70-75)
- Earnings in 10 days (Feb 24)
Entry Strategy:
- DO NOT CHASE HERE – Wait for 5-8% pullback
- Entry Zone: $52-54 (recent support)
- Or breakout above $59.80 (all-time high) with volume
- Position Size: 2-3% MAX (this is HIGH RISK)
Risk Management:
- TIGHT STOP: 8-10% below entry
- Profit Target 1: $60 (+6% from $56.63)
- Profit Target 2: $66 (analyst target, +17%)
- Moon Shot: $70-75 if earnings beat
CRITICAL: Close 50% before Feb 24 earnings to lock gains
For Buy-and-Hold Investors:
STAY AWAY – Here’s why:
- Valuation risk – P/E of 62 is bubble territory
- Single thesis – Entirely dependent on AI data center build-out
- Legal overhang – Securities lawsuits are red flags
- Insider selling – Management taking profits at highs
- 34% short interest – Professional bears are VERY confident
Better Options:
- If you want AI exposure: Buy NVDA, MSFT, GOOGL (safer)
- If you want energy: Buy XLE, XOM, CVX (dividend + stability)
- If you want growth: Buy proven tech with lower P/E
My Personal Take
What I’d Do:
Scenario 1 – Before Feb 24 Earnings:
- Wait for pullback to $52-53
- Enter with 2% position
- Set stop at $48 (8% loss)
- Sell 50% at $60, let rest run to $66
- Exit entirely before Feb 24 earnings
Scenario 2 – After Feb 24 Earnings:
- If beats and gaps up to $62-65: WAIT
- If beats and holds $56-58: Consider small position
- If misses and drops to $45-48: STRONG BUY (oversold)
Position Sizing:
- MAX 2-3% of trading account
- This is a SPECULATION, not an investment
- Only use money you can afford to lose
Bottom Line – The Truth
Solaris Energy Infrastructure is riding the AI data center power boom and executing flawlessly. The fundamentals (84% EPS growth) support continued upside, and the PEG ratio of 0.43 suggests it’s actually CHEAP on a growth-adjusted basis.
BUT…
The 34% short interest, 62 P/E, insider selling, and legal issues scream “DANGER.” This is a momentum trade masquerading as an investment.
If AI data center build-out continues for 2-3 years, this stock could hit $100. If the AI hype cycle peaks or earnings disappoint, this crashes to $30-35.
It’s binary. It’s volatile. It’s NOT for widows and orphans.
My Action:
Added to high-risk watchlist. Waiting for either:
- Pullback to $52-53 for swing trade entry
- Post-earnings clarity (Feb 24)
- Break above $60 with volume for momentum play
Not holding through earnings – the risk/reward is asymmetric (limited upside, massive downside if misses).
Next Catalyst: Feb 24, 2026 – Q4 2025 earnings (After Market Close)
— Timothy McCandless, The Hedge
Disclosure: This is a high-risk speculation. Do NOT bet the farm. Position size 2-3% MAX. Always use stops. This analysis is for educational purposes only.
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