3. Talen Energy Corporation (NASDAQ:TLN)
Year-to-date Share Price Gain as of September 11: 126.50%
Number of Hedge Fund Holders: N/A
Talen Energy Corporation (NASDAQ:TLN) is a leading power infrastructure company in the United States. It not only sells electricity but also sells the capacity to produce electricity and offers ancillary services, which support the stability and reliability of the electricity grid. It is also powering the AI revolution by providing clean energy to data centers.
The company is unique in terms of its low carbon emission production. Around 53% of the total energy generation of Talen Energy Corporation (NASDAQ:TLN) is carbon-free, indicating its green approach. This is a strong competitive advantage, especially with the recent rise in electricity demand due to AI and Data Center usage. With the increased demand for electricity, the environmental threats of huge-scale generation have become more prominent thus putting green power companies like Talen Energy Corporation (NASDAQ:TLN) at an edge.
It recently co-located a 1-gigawatt AWS data center campus near its Susquehanna nuclear plant. Amazon Web Services (AWS) is planning to set up a large data center in Pennsylvania, which will require 960 MW of power. Talen Energy Corporation (NASDAQ:TLN) will benefit from the data center as its nearby nuclear power plant will supply energy for the center. The $300 million escrowed portion of the Cumulus data center campus was released to the company marking the start of the development of the AWS campus.
Financially speaking the company posted a successful Q2 2024 and also raised its guidance. It generated $376 million in adjusted EBITDA and $165 million in free cash flow. Looking ahead, management expects EBITDA in the range of $720 million to $780 million (previous range $600 – $800 million) and adjusted free cash flow between $245 million and $285 million.
TLN is one of the unstoppable growth stocks to buy now. It has positioned itself to capitalize on the growing demand for clean energy to fuel data centers. The stock has soared 126.50% on a year-to-date basis.
Alluvial Capital Management stated the following regarding Talen Energy Corporation (NASDAQ:TLN) in its Q2 2024 investor letter:
“Talen Energy Corporation (NASDAQ:TLN) has had quite a year, selling off non-core power generation assets, buying back huge quantities of stock, and now listing on the NASDAQ. Talen is one of those too-rare cases where everything goes according to plan. The company is now enjoying a moment in the sun thanks to its ownership of a top-tier producer of reliable, low-carbon energy, the Susquehanna Steam Electric Station. So, what’s next? Talen will continue to sell off its legacy fossil fuel-burning power generation fleet and return excess capital to shareholders through buybacks. I still think the end game for Talen is a sale of the company once its less attractive assets are divested. Susquehanna, the nation’s sixth-largest nuclear facility with 2.5 gigawatts of power production capacity, is just too much of a prize to be held by a company of Talen’s size.”
