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Talen Energy To Benefit From DeepSeek, 'Lucrative Datacenter Contract': Analyst
TLNTalen Energy Corporation(TLN) Benzinga·2025-02-03 16:29

Group 1 - Energy and utility stocks are gaining attention following the launch of China's open-source AI model DeepSeek, which is expected to reduce energy consumption compared to existing AI technologies [1] - Talen Energy Corp has significant opportunities from datacenter growth and a contract with Amazon's AWS segment, as highlighted by BofA Securities [1] - Analyst Ross Fowler initiated coverage of Talen Energy with a Buy rating and a price target of 253[1]Group2−ThebullishoutlookonTalenEnergyisbasedonitslucrativeAWSdatacentercontractwiththeSusquehannanuclearplant,newlyproposedRMRrates,andthepotentialforhigherpowerprices[2]−TheAWScontractisa10−yearpowerpurchaseagreementprojectedtocontribute253 [1] Group 2 - The bullish outlook on Talen Energy is based on its lucrative AWS datacenter contract with the Susquehanna nuclear plant, newly proposed RMR rates, and the potential for higher power prices [2] - The AWS contract is a 10-year power purchase agreement projected to contribute 110 million to Talen Energy's EBITDA starting in 2027 [3] - Talen Energy has secured a reliability-must-run (RMR) agreement with PJM Interconnection, which could guarantee 110millioninrevenuesfromMay2025through2029[3]Group3−Despitecompetitionandanewpricecap,higherpricesareexpectedtobetterreflectmarketdynamics[4]−Thedatacentersectorisanticipatedtogrow,potentiallybenefitingindependentpowerproducers(IPPs)[4]−TalenEnergy′ssharesincreasedby1.68110 million in revenues from May 2025 through 2029 [3] Group 3 - Despite competition and a new price cap, higher prices are expected to better reflect market dynamics [4] - The datacenter sector is anticipated to grow, potentially benefiting independent power producers (IPPs) [4] - Talen Energy's shares increased by 1.68% to 225.46 at the time of publication [4]