Three Important Solar Stocks - Low Valuations With Big Upside

 

The solar industry is booming again this year. The U.S. installed 14.5 GW of large-scale solar so far this year. Solar was 75% of grid capacity additions in the first half of this year. Residential solar is also growing 14% a year. On larger projects, solar was over half of all new generation added to the U.S. grid in 2025.

Over recent years, the cost of solar panel modules has decreased substantially due to improved photovoltaic technology and manufacturing scale. This makes them more feasible, and the trend will continue. According to nonprofit Sun Day campaign, solar has been the largest source of new generating capacity added each month for 21 consecutive months, since September 2023.

Look at this graph from the EIA, showing the tremendous lead from utility-scale solar

Solar farms are increasingly being built together with battery storage systems. Around half of all battery storage systems are a combined solar and battery system. 

Looking at solar growth through the lense of data center expansion, the future looks bright. Large data centers are seeing a growing trend in 2025, where hybrid power sourcing is combining on-site generation with grid backup.

 According to Deloitte and RMI, hyperscale operators have responded to four to seven year grid interconnection delays by building behind the meter natural gas turbines or solar plus battery microgrids.

The U.S. Department of Energy’s Industrial Efficiency and Decarbonization Office funded the 2024 United States Data Center Energy Usage Report by Lawrence Berkeley National Laboratory. Lawrence Berkeley Lab found that the carbon intensity of electricity used by data centers was 48% higher than the U.S. average. This is partly due to many of them being in states with dirtier energy sources, like coal.

 They also showed that 4.4% of all the energy in the US now goes toward data centers. Clean energy is definitely needed in this area. The big tech data centers keep getting bigger and bigger. They all need power backup and solar will be a part of that. 

Where The Growth Comes From

Data centers, by current forecasts, will grow 15-23% CAGR and by 2030, are projected to consume between 8% and 12% of total U.S. Electricity. S&P Global’s 451 Research adds that total grid power demand from data centers may triple by 2030. This is with the normalcy bias that AI Co-Pilots and Agents won't see faster adoption. I see data center power draw eventually being much higher than forecasts, especially after 2030.  I'll get to that in a moment. 

Data centers are just a piece of the power draw. Overall, U.S. Electric grid growth from now until 2030 is forecasted to grow at a base case of 2.5% to roughly 3% per year. The most growth is forecasted for battery storage, coming in at 116% growth through 2035. Solar is second at 64% growth. 

There is a bit of a problem, because after decades of flat electricity usage, demand is surging, but the infrastructure is old. Furthermore, 67% of electric utilities’ spending in 2024 was on replacements ($63 billion), while only $32 billion was spent on new lines and substations. The need for alternatives, like solar, has never been greater.

I'm particularly bullish on the energy demand because I see a strong potential that the growth from Agentic AI and AI Co-Pilots and Bitcoin mining exceeds the estimates. AI inference is already projected to take a large share of total U.S. electricity in the near future. In a couple years, it is going to surpass AI training. The estimates going five years out vary widely, and no one really knows the exact timeline and impact, of course. The EIA and Deloitte has 2030 estimated at 945 TWH to 1065 TWH. Even if that is just the base-case we are still talking about an incredible power draw.

Gen AI is growing at over a 30% CAGR. The AI assistants and AI Co-Pilots market is currently expected to grow at a slightly higher CAGR than Gen AI at mid 30% to mid 40% through 2030 according to Stanford and Grandview. So, before we have even seen the pre-seed startups still building come yet it is already tremendous expectations. Even Gen AI isn't fully adopted yet with the consumer. Only about half of adults are using it. So, the upside to the growth the next 10-15 years is hard to fathom.

The Agents and Co-Pilots are what will truly be beneficial to businesses. This growth is going to takeoff. It's like going from a dial-up internet modems in the 90s to ethernet or DSL broadband. Nvidia CEO Jenson Huang expects every company to have an "AI Factory." AI factories industrialize the creation of intelligence by making AI generation repeatable, scalable, and measurable across sectors.

This BOFA graph below illustrates a scenario. I like it not for the exact number estimates but rather to show how the inference could start to skyrocket exponentially to a large percent of total power usage very soon.

90% of enterprises currently anticipate spending more on AI in the future. Some sources already have enterprise adoption at over 70%. My relative is building an AI Co-Pilot for auto technicians that improves their productivity and revenue. They have been using clunky software for years. So, I think normalcy bias is discounting how widespread and fast the newest software will roll-out and see speedy adoption. 

Another potential big driver of energy demand is Bitcoin. Bitcoin, whether one likes it or is skeptical, has been an outperforming asset since its beginning. If the price appreciation continues its bullish trend it will draw significantly more power as time passes.

Nextracker NXT

Nextracker NXT sells solar trackers and energy yield management systems. Their business model is built around large-scale solar farms that power utilities, corporations, and regional grids. Nextracker is the industry leader, holding about 70% U.S. market share. 

I looked through Nextracker's latest quarterly and historical data. I'm glad I decided to look at this one, because it is the number one holding in the solar ETF TAN.

It has rightfully owned the #1 spot, being the global market leader based on gigawatts shipped for ten straight years.

The only other U.S. based competitor I found with a big U.S. presence is Array Tech ARRY. The key difference between the two is their size. Nextracker is a $14 billion company, and ARRY is only a $1.5 billion company. Even so Array has installed an impressive 80GW worldwide.

Over the last five years, Nextracker's revenue has grown at a 22% compounded annual growth rate. This is extremely good growth for being a $13 billion company. Less than 7% of Fortune 500 companies with market caps of $10 billion or higher in 2024 to 2025 grew revenue 20% year over year.

Earnings for the full year are forecasted at $4.20 a share. With the stock at $87, that is only a 20 PE ratio. Trailing twelve month price to free cash flow is just 22 also.

This year, Nextracker bought two companies.They purchased Bentek, an industry pioneer and manufacturer of electrical infrastructure used in all types of solar power plants. Additionally, in May they acquired 100% of the interest in OnSight, a supplier of autonomous inspection robots and fire detection systems purpose-built for solar plants.

Even after these purchases, Nextracker still has $743 million in cash. They have also been creating a lot of shareholder value. Shareholder equity is ballooning. It grew from negative -$3 billion in 2023 to $1.8 billion as of the latest quarter.

Array Tech ARRY

Array Tech ARRY also benefits from the grid expansion. They make similar sun tracking systems like Nextracker.They say that three decades of field-tested design improvements have resulted in the ARRAY DuraTrack being the most durable, reliable tracking system. They serve utility-scale developers which fits perfectly for this theme.

I expect they will have solid growth going forward, however, Array had a sharp decline in revenue in 2024. Profitability has been inconsistent too. This has given them a much lower valuation vs Nextracker. Array's PE ratio, based on this years forecasted earnings of $.67 a share is just a 13 multiple.

Canadian Solar CSIQ

Canadian Solar CSIQ, in their last conference call, mentions having USA and Spain data center products being ready in the next few quarters. CSIQ's market cap is currently just under $1 billion. If they start getting hyperscaler contracts, those could really move the needle for them given the market cap is only $977 million. 

They can grow sales and earnings as they showed from 2021 to 2023. The valuation has gotten historically low. It is trading so cheap now for just .16 times sales and 1.00 times enterprise value.

Final Thoughts

In the current U.S. equity market, there are a lot of industries sporting very high to outrageous valuation multiples based solely on future potential. The solar industry's prospects are more than just a promise of growth, it is a clear reality based on the trend and data. Nextracker and Array Tech will be a big part of the grid and data center expansion. Based on their valuation, they are very compelling stocks for the long-term. I like Nextracker the most because of the strong fundamentals. Array is more of a risk to reward play if they can improve the bottom line, there is a lot of promise.

Data Center Infrastructure Thematic

Data Center Thematics-Demand Driven From Artificial Intelligence AI

The data center thematic encompasses multiple industries including electric utility, electrical equipment and components, construction & engineering, semiconductors and last but not least energy.

Data center growth is projected at 11% going forward, largely driven by increasing artificial intelligence workloads. AI workloads currently account for 14% of global data center power usage, but this is expected to grow to 33% by 2030 atleast. The AI race among big tech and AI labs is as competitive as it has been this year. Every few months, atleast, there are new models being released that are better then the previous market leader.

Agentic AI is beginning to be commercialized by tech companies like OpenAI with their Operator. Google also released an agent throught their LLM Gemini. Anthropic introduced theirs also. So, the trend in AI growth is as clear as recent prior years. The AI demand is going to continue to need more data centers as time goes on.

There is also a turning point happening with mega data centers and the massive $500 billion Stargate joint data center project. The Texas data center site has buildings that are half a million square feet each. There are 10 buildings currently being built. They will expand to 20 other locations beyond the Abilene location. Construction is underway right now, and I believe this could be just the begininning of accelerating secular data center growth.

The Companies

Let's look at some of the major construction and engineering companies in this area and see what we can find. These large companies are getting atleast around a 1/3 of their revenue from data centers.

AECOM (ACM) is an engineering and construction company that currently has a record backlog and pipeline. They are beating earnings and raising guidance every quarter. They have growth in the highest margin markets. Free cash flow in the recent quarter was up 141%.

They've gotten data center contracts in the past internationally. In the U.S. last year they got the Databank data center in Culpeper, Virginia expected online in 2027.

Data center projects are higher margin than others for these kinds of companies. So, with my base case of accelerating data center growth, this is very advantageous.

While none of the large-cap stocks in this area are "cheap" with a trailing PE multiple of 23 for ACM, I see 12-15% EPS growth going forward. So, there is growth at a reasonable price (GARP) here with room for multiple expansion.

Jacobs Solutions (J) is a top data center construction and engineering firm. Just this month they got a contract with Nvidia to work with them on data center operations for the Omniverse Blueprint and Nvidia's AI factory digital twin blueprint.

They have a $22.16 billion backlog up a whopping 20% YoY. Jacobs has been buying back stock for years and share count has decreased year over year. I see them growing earnings 12-19% a year and the PE multiple is currently 22. Another GARP here.

Fluor (FLR) is another major steady player here, and they do hyperscale projects. The difference with them is they have a sizable oil and gas and chemicals segment. It's been a drag on growth for many years but is more stable the past five.

A different thing also is they have been a huge investor in Nuscale (SMR) that builds small modular nuclear reactors for power. At one time, in the past they had a $600 mil stake but have reduced this significantly just recently. They still have a sizable stake in the hundreds of millions and it's been dragging down their growth some. It's interesting because the market currently sees this as a negative as commercialization has been lacking but we all know the coming trend here with SMR's due to growing electricity demand.

Ten years ago energy used to be one of Fluors largest segments and it's been replaced with the urban solutions. With the recent White House order, just yesterday May 23, 2025 to advance national nuclear production and revitalize the U.S. nuclear industrial base, I see a likely scenario of the Nuscale stake vastly outpacing the oil and gas side.

Fluor TTM EPS is $2.57 and with the stock at $41 this is a 16 PE multiple. The lower PE seems to be a product of energy being about a 1/3rd of revenue and the margins here are very low and growth has been poor lately.

Bottom Line

I like all of these companies as long-term investments in the AI data center theme. I see market corrections as good opportunities to add. While other companies in the AI theme could offer more accelerative top line growth, I see these as safer stalwart type prospects.

There are many more data center investment opportunities I will post research on soon. So stay tuned. I recently did some analysis on data center REIT's Equinix (EQIX) and Digital Realty Trust (DLR). So, I think there could be the most long-term value in FLR valuation wise here vs others here assuming commercialization of SMR's picks up soon.

Rare Earth Investing Opportunity as China Strikes Back

This past Friday, Beijing, in response to the new U.S. tariffs, announced controls on exports of medium and heavy rare-earths.

I view these recent trade developments as a catalyst that further strengthens my favorite mining stocks investment theses.

The most recent Chinese export restrictions Friday include heavy rare-earth elements samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium to the U.S. This is just the most recent of many such export restrictions over recent years, even recent months.

Heavy rare earth mining company USA Rare Earth ticker USAR stock was up +16% Friday, despite the huge overall stock market sell-off. The relative strength is significant to me as very few stocks were positive Friday. The only major asset higher was U.S. Treasury bonds as investors sought safety.
While the public and Wallstreet are hyper-focused on the tariffs, capital markets and economic consequences I see the element export controls as providing actionable opportunity catalysts. I see further catalysts likely also as we now have a clear trend with how China is reacting to trade tensions with export controls.

These recent tariff retaliatory actions from China are important because China processes approximately 90% of the world's rare earth elements and supplies 78% of U.S. demand.

In December 2024, China banned exports of gallium, germanium, and antimony to the U.S., citing their dual-use applications in semiconductors and defense technologies.

In February 2025, licensing requirements were put on tungsten, tellurium, bismuth, indium, and molybdenum. These metals are critical for electronics. To me this strengthens, even further, the investment thesis in U.S. rare earths and critical mining operations.

In addition, just weeks ago President Donald Trump on March 20,2025 made an executive order titled “Immediate Measures to Increase America’s Mineral Production.”

This directive aims to boost domestic production of critical minerals and reduce reliance on foreign imports. It is using the Defense Production Act (DPA).

The DPA is invoked to accelerate domestic mineral production by prioritizing mining projects critical to national security and industrial needs.

Federal agencies, including the Department of Defense (DoD), Department of Energy (DOE), and Department of the Interior (DOI), are directed to identify and expedite priority mineral production projects.

The order broadens the definition of "critical minerals" to include uranium, copper, potash, gold, and any other materials deemed essential by the Chair of the National Energy Dominance Council.

I speculate many of these companies could possibly even be protected further with grants or further federal orders.

These rare elements are key to defense systems, renewable energy technologies, and advanced electronics. This supply shock could significantly drive up prices. This could benefit the mining companies profits.

China supplies 63% of the antimony we use here in the U.S. Antimony is crucial for things like military equipment, metal alloys, electronics etc.

I've mentioned many diversified rare earth miners I like already on my X/Twitter account. Some are tickers NB UAMY EMX TMRC CRML NAK in addition to the new ones in this post.

Rare Earth Moly

Another key element China has made export controls on is molybdenum. In February of this year China put a control on molybdenum and other metals like tungsten, tellurium, bismuth, and indium. Exporters now need approval from China's Ministry of Commerce and General Administration of Customs, creating bottlenecks in processing shipments.

China supplies roughly half of the molybdenum or moly the U.S. uses.

Moly is extremely crucial in metal steel making, as it strengthens steel and maintains it in many other ways, like helping steel strength and stability at elevated temperatures.

The largest suppliers of steel to the U.S. are Canada, Brazil, and Mexico, which collectively accounted for about 49% of U.S. steel imports. If trade tensions further escalate perhaps the U.S. will need to make more steel domestically. Regardless, moly is always needed.

The Northern Dynasty's (NAK) Alaska Pebble deposit contains an estimated 5.6 billion pounds of molybdenum, making it one of the largest undeveloped moly resources in the world. It has yet to be approved and is not certain to but these recent trade events may further increase the chances in my view.

Pebble also has one of the worlds largest undeveloped copper resource in the whole world. There are 80.6 billion pounds of copper in total, according to some estimates. Conservative measured and indicated estimates are 57 billion pounds of copper with which is still a gigantic number.

Perpetua Resources Corp ticker (PPTA) just got approval in January to go ahead with the moly Stibnite project.

Stibnite’s 148-million-pound antimony reserve is the only identified domestic source in the US and could supply 35% of the country’s antimony demand in its first six years.

Other notable companies include Miner MP Materials (MP) owns the Mountain Pass site, which is the only large rare earth mining site of scale in the Western Hemisphere. Another rare earth miner I added to the basket is Critical Metals CRML. They have an interest in the Tanbreez Rare Earth Project in Greenland. It's one of the largest rare earth deposits globally, with an estimated 4.7 billion metric tons of host rock. "They plan to invest $10 million in further exploration and drilling by the end of this year. Once this investment is completed, the company can increase its equity stake from 42% to 92.5% by issuing additional shares worth $116 million (according to Benzinga)." There are plenty of other publicly traded miners who mine moly, but they also mine other metals with economic slowdown sensitivity like copper. These stocks have extremely high beta and aren't going to generate alpha in a market sell-off, however, when volatility is lower they can be attractive.

One such company is Freeport-McMoran (FCX) is a big mining company and one of the largest producers of moly globally.

I have picked mine based on recent months technical strength. There are also a slew of junior miners that trade on the Toronto exchange but I'm focusing on ADRs here.

Iluka Resources ticker ILKAY, is constructing Australia’s first fully integrated rare earth refinery. It appears to produce only the dysprosium and terbium on the new China list.

The stock trades on very, very thin volume so one would need to be catious of this. It's in a long downtrend, and to me, needs to get better technicals and relative strength before I'd personally consider it.

My final thoughts are there are intermediate investing opportunities in these companies as catalyst trades with small position sizes. I don't like individual mining companies as long-term investments (1-2+ years) from watching many over the years.

Some cycles certain companies stocks perform well and some cycles they don't. In the case of gold and silver it's often more advantageous to hold vehicles like ETFs,futures or even the physical itself. Full Disclosure:I hold shares of NB UAMY NAK ( stock and calls and put hedges) I plan on purchasing USAR stock and MP soon.

FiscalNote (NOTE) AI SaaS Analytics

FiscalNote ticker symbol NOTE serves a global, diverse customer base that includes businesses (including over half of the Fortune 100), government agencies, law firms, professional services organizations, trade groups and non-profits. They serve all three branches of government including the White House and Dept. of Defense.

The company was founded in 2013 by Tim Hwang and his childhood friends Gerald Yao and Jonathan Chen. They secured initial investment from notable investors including Mark Cuban and Jerry Yang.

They are the market-leading AI platform for the regulatory, legislative policy and geopolitical intelligence sectors.

To put their software in simple terms FiscalNote is like a super-smart news alert system for laws and rules that: Watches government websites and documents 24/7. It summarizes complicated legal documents into simple language and alerts you when important changes happen.

Imagine you own a business and need to know about new laws that might affect you: FiscalNote software gives quick answers instead of reading thousands of pages of government documents. Saves money and time instead of hiring expensive lawyers to explain everything. FiscalNote's software sends you a simple alert about new rules and explains how they affect your business.

In the most recent conference call management calls the software "essentially the Bloomberg terminal for regulatory, legislative and strategic risk, drawing upon a deep reservoir of technical expertise, proprietary data and analytical tools." The Bloomberg terminal is the top tier terminal used by finance professionals.

One of the positives I see about the company is that it still has founders in leading positions. Tim Hwang is a co-founder and is the current Executive Chairman. Gerald Yao is another co-founder and is Chief Strategy Officer. Tim Hwang was the CEO since the start and just a month ago is replaced by Josh Resnik at CEO.

Financials

I looked over the yearly financial report for the 2023 year. They generated total revenues of $132.6 million and $113.8 million for the years ended December 31, 2023 and 2022, respectively. So revenue grew 16% which is good growth.

They get recurring revenues through the subscription-based model, which accounts for approximately 90% of total revenues.

In 2023 gross profit margin was 82% vs 80% in 2022. These are really good gross margins and they should be able to get a net profit with these kind of margins. I'm a little surprised this net profit isn't happening now, however I see a rising trend in earnings per share the last four quarters. If this trend continues ceteris paribus they should have profitability in a year or less.

I did see in the quarter ending in March in '24 they put up a cool $.39 a share in net income or $50.5 million in net income. This was good to see because it shows that they are capable of the feat.

In the last quarter revenue was down -13% qoq. A positive was the quarter represented a $2.7 million improvement in adjusted EBITDA year over year and marked the fifth straight quarter of adjusted EBITDA profitability for FiscalNote. I really want to see more revenue come in this year though.

On the Q3 '24 earnings call they forecasted $9 million in adjusted EBITDA marking the first full calendar year of adjusted EBITDA profitability.

Valuation

I see this stock as a potential growth stock. The way I like to look at big picture valuation on growth stocks is the price to sales ratio P/S. It shows how much you are paying for the sales. Right now it's a low valuation at just 1.4 X trailing twelve month sales.

I've been looking at a lot of cheap companies lately and none of them were even less than 1.5 X sales. The big sales growth isn't here right now and the market is pricing this in. I'm bullish on the industry growth so I see a good discount here just from a sales standpoint. I'm optimistic they can grow the top-line 10%.

Industry growth

The global ai-regulatory tech industry according to market.us is expected to be worth around $29.6 Billion by 2033, from $1.3 Billion in 2023, growing at a CAGR of 36.7% during the forecast period from 2024 to 2033. That is s very good CAGR.

Institutional holders

21% of NOTE's shares are held by Maso Capital Partners. They are a Hong Kong-based hedge fund established in 2012 by Manoj Jain and Sohit Khurana, both former managing directors at Och-Ziff's Asia fund. This holding percentage is 7 times more than the next largest holders being Morgan Stanley, Vanguard and Blackrock.

Maso has about 36 positions and their top holding is NOTE which is the largest position at 35%. Other top holdings are SOHU, YY, VNET Group and i-Shares Russell 2000.

Technical Analysis

Since the IPO, the stock has never gotten enough sustained buying to put in a major technical bottom and get lasting momentum. It's threatening this here but has to see $1.61 a share hold first.

Final Thoughts

For a company as small as this they have a strong business being subscription based and with a healthy diversity of clients. The big play here is as more companies start using AI they are poised to benefit and grow fast. The current valuation makes sense if this happens.

Also, having such big gross margin makes them likely to get over the net income hump. This will likely be a positive catalyst that boosts the stock.

Disclosure: I am long stock