Goldman Sachs’ Best Phase 2 AI Stocks: Top 24 High Conviction AI Stocks

10. NRG Energy, Inc. (NYSE:NRG)

Year To Date Share Price Gain: 75.12%

Number of Hedge Fund Investors in Q2 2024: 56

NRG Energy, Inc. (NYSE:NRG) is a sizeable and diversified energy company. The firm operates as an independent utility, and it also provides generators, HVAC installation, home protection products, and other services. It serves customers primarily in Texas and relies on a mix of renewable and traditional power generation sources. As of 2023, NRG Energy, Inc. (NYSE:NRG) had 13GW in power generation capacity, and the firm also benefits from the fact that it is not beholden to regulators for its rates. A turnaround story with influence from Elliot Management, NRG Energy, Inc. (NYSE:NRG)’s stock soared by 6% in late September after it increased FY24 midpoint operating income guidance by 5.1%, indicating to investors that it was now on stable footing. NRG Energy, Inc. (NYSE:NRG) is also part of a bid of $5.38 billion in Texas funding for gas fired power plants, which could increase its capacity to serve data centers. Speaking of which, the firm is also aiming to grow its load 3x at its Hyperscaler and data center sites which cover a whopping 21,000 acres.

NRG Energy, Inc. (NYSE:NRG)’s management commented on its Hyperscaler plans during the Q2 2024 earnings call. Here is what they said:

“Our singularly devoted development team is diligently working to maximize the value of these sites. As a reminder, our portfolio includes 21 sites encompassing 21,000 acres of land in competitive markets. These sites are ideally suited for new large loads and power plant development, offering co-location opportunities both behind and in front of the meter.

To identify the sites best suited for data centers, key factors include access to water for cooling, premium fiber channel access for low latency, and existing grid access and infrastructure for rapid market entry. As you can see, our sites possess these attributes, but also have potential for other large load applications. In this appendix, we provide several paths to value under consideration. I look forward to discussing this more with you as we progress.”