U.S. Machinery Data Center Power Gen: How big is the onsite and standby TAM and what's different about CAT and CMI? Chad Dillard +1 917 344 8469 chad.dillard@bernsteinsg.com Miguel Marques, CFA +1 917 344 8432 miguel.marques@bernsteinsg.com Specialist Sales Steve Song +1 917 344 8401 steve.song@bernsteinsg.com This note sizes the onsite and standby data center power generation TAM and compares strategic positioning of Caterpillar & Cummins. We draw on our proprietary data center power gen model (available i ...

Core Viewpoint - Capital Power Corporation is a significant player in the North American energy sector, focusing on sustainable energy solutions through various power generation projects [1] Group 1: Company Overview - Capital Power Corporation specializes in developing, acquiring, and operating power generation facilities, with a focus on natural gas, wind, and solar power [1] - The company has a market capitalization of approximately $7.92 billion, indicating its substantial presence in the energy market [3][6] Group 2: Stock Performance and Analyst Ratings - TD Securities reaffirmed a "Buy" rating for Capital Power, setting a stock price target at $51.03, despite a recent decrease of $0.41, or about -0.80% [2] - The price target for Capital Power was raised from C$78 to C$80, reflecting a positive outlook on the company's future performance [3][6] - The stock has shown volatility, with a 52-week performance range of $52.82 (high) and $30.30 (low), highlighting its growth potential [3][6] Group 3: Financial Insights - Insights from Capital Power's recent Q3 2025 earnings call provide a deeper understanding of the company's financial health and strategic directions, supporting the optimistic view from analysts [4] - Despite being traded on the OTC exchange with a low trading volume of 304 shares, the company's strategic initiatives foster positive sentiment among analysts [5]

Texas is backing a proposed Permian Basin power plant fueled by natural gas with a $1.1 billion low-interest loan, the largest such project under a state program aimed to shore up supplies after widespread blackouts in 2021.Competitive Power Ventures will use the loan from the Texas Energy Fund to construct a 1,350-megawatt combined-cycle gas plant — among the more efficient types of fossil-fuel generation — in the Permian that’s expected to start up by 2029, CPV said Thursday in a statement. That’s enough ...

Financial Data and Key Metrics Changes - Quanta Services reported revenues of $7.6 billion for Q3 2025, with a net income of $339 million, translating to $2.24 per diluted share. Adjusted diluted earnings per share were $3.33, and adjusted EBITDA was $858 million [12][14] - The company raised its full-year revenue expectations to a range of $27.8 billion to $28.2 billion, alongside an increase in free cash flow expectations to $1.5 billion at the midpoint [12][14] - The record backlog reached $39.2 billion, reflecting strong demand and operational momentum [7][12] Business Line Data and Key Metrics Changes - The Total Solutions platform was expanded to address growing generation and infrastructure needs, particularly in renewable energy and battery storage solutions [9][10] - The company emphasized its integrated solution-based model, combining craft labor with engineering and technology to deliver comprehensive infrastructure solutions [8][9] Market Data and Key Metrics Changes - Quanta Services is positioned to capitalize on a generational investment cycle in critical infrastructure, driven by increased demand for resilient grids and expanded generation capabilities [9][10] - The company noted robust activity across its end markets, particularly in the electric segment, which is experiencing accelerating demand [7][9] Company Strategy and Development Direction - The strategy focuses on delivering certainty to customers, investing in talent and technology, and expanding addressable markets through disciplined growth [10][14] - Quanta aims to lead in converging markets where utilities and industrial operators require scalable integrated solutions, reinforcing its reputation as a trusted partner [8][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving record backlog and double-digit earnings per share growth in 2026, supported by strong end-market momentum and consistent execution [10][14] - The management highlighted the importance of collaboration with clients to mitigate risks associated with larger projects, ensuring a balanced approach to project delivery [29][91] Other Important Information - The company issued $1.5 billion in notes to enhance liquidity and recapitalize the balance sheet, benefiting from a recent ratings upgrade [12][13] - Quanta's workforce remains a critical asset, with ongoing investments in craft skills and training to meet growing demand [100] Q&A Session Summary Question: Potential partnership with AEP for high-voltage transmission opportunities - Management confirmed ongoing collaboration with AEP but noted that none of the high-voltage projects are currently in backlog, emphasizing a cautious approach to ensure proper resource allocation [20][21] Question: Execution risks for larger Total Solutions jobs - Management reassured that they have built a strong partnership model to de-risk larger projects, focusing on collaborative planning and cost management [28][29] Question: Strategy between recurring services and discrete EPC project delivery - Management stated that the company maintains a balance between base business and larger projects, with a focus on long-term growth profiles [33][34] Question: Expansion into data center projects - Management indicated readiness to expand into data center construction, leveraging existing capabilities to provide comprehensive solutions [42][43] Question: Market opportunity for combined cycle gas turbines (CCGTs) - Management emphasized a selective approach to CCGT projects, focusing on total solutions rather than pursuing all available opportunities [56][57] Question: Margin profile for the Total Solutions platform - Management indicated that the margin profile for the new platform is expected to be in line or accretive compared to current electric power margins [84][85] Question: M&A focus to complement craft labor pool - Management clarified that acquisitions are strategically focused on filling gaps rather than increasing capacity, with ongoing efforts to enhance the vertical supply chain [93][94] Question: Scarcity of skilled trades impacting growth - Management acknowledged challenges in recruiting for specific trades, particularly inside wiremen, and highlighted ongoing investments in training and workforce development [100][101]

Financial Data and Key Metrics Changes - Quanta Services reported revenues of $7.6 billion for Q3 2025, with a net income of $339 million, translating to $2.24 per diluted share. Adjusted diluted earnings per share were $3.33, and adjusted EBITDA was $858 million [14][15] - The company raised its full-year revenue expectations to a range of $27.8 to $28.2 billion and free cash flow expectations to $1.5 billion at the midpoint, driven by a healthy free cash flow of $438 million during the quarter [14][15] Business Line Data and Key Metrics Changes - The electric segment showed accelerating demand, contributing to double-digit growth in revenue, adjusted EBITDA, and adjusted EPS compared to the prior year [8][14] - The Total Solutions power generation platform was expanded, leveraging capabilities in renewable energy and battery energy storage solutions [10][11] Market Data and Key Metrics Changes - Quanta Services has a record backlog of $39.2 billion, reflecting robust activity across end markets and positive momentum heading into 2026 [8][14] - The company is positioned to capitalize on a generational investment cycle in critical infrastructure, driven by increased demand for resilient grids and expanded generation and storage [10][11] Company Strategy and Development Direction - The company aims to deliver certainty to customers, invest in talent and technology, and expand addressable markets through disciplined strategic growth [11][16] - Quanta's integrated solution-based model differentiates its platform by combining craft labor with engineering, technology, and program management expertise [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving record backlog and another year of double-digit earnings per share growth in 2026, supported by strong execution and market momentum [11][16] - The management highlighted the importance of collaboration with clients to mitigate risks associated with larger projects [30][31] Other Important Information - The company issued $1.5 billion of notes to enhance liquidity and recapitalize the balance sheet, benefiting from a recent ratings upgrade [15] - Quanta Services is focused on maintaining its investment-grade rating while strategically deploying capital [15] Q&A Session Summary Question: Potential partnership with AEP for high-voltage transmission opportunities - Management confirmed a long-standing relationship with AEP and indicated ongoing discussions, but noted that none of the high-voltage projects are currently in backlog [21][22] Question: Execution risks for larger Total Solutions jobs - Management emphasized a collaborative approach with clients to de-risk projects and ensure favorable terms [29][30] Question: Strategy between recurring services and discrete EPC project delivery - Management stated that the company maintains a balance between base business and larger projects, expecting to stack large projects on top of the base [35][36] Question: Expansion into data center construction - Management expressed confidence in their ability to build comprehensive data center solutions, leveraging existing capabilities [45][46] Question: Market opportunity for combined cycle gas plants - Management indicated a selective approach to pursuing combined cycle gas plants, focusing on total solutions rather than one-off projects [57][58] Question: Margin profile for the Total Solutions power generation platform - Management stated that the margin profile for the new platform is in line or accretive compared to current electric power margins [87][88] Question: M&A focus to complement craft labor pool - Management clarified that acquisitions are strategic and aimed at filling gaps rather than increasing capacity [96][97] Question: Scarcity of skilled trades impacting growth - Management acknowledged scarcity in certain trades, particularly inside wiremen, and emphasized ongoing investment in workforce development [102][103]

Financial Data and Key Metrics Changes - Quanta Services reported revenues of $7.6 billion for Q3 2025, with a net income of $339 million, translating to $2.24 per diluted share. Adjusted diluted earnings per share were $3.33, and adjusted EBITDA was $858 million [12][14] - The company raised its full-year revenue expectations to a range of $27.8 to $28.2 billion and free cash flow expectations to $1.5 billion at the midpoint, driven by a healthy free cash flow of $438 million during the quarter [12][14] - The record backlog reached $39.2 billion, reflecting strong demand and operational performance [7][12] Business Line Data and Key Metrics Changes - The electric segment showed accelerating demand, contributing significantly to the overall revenue growth [7][9] - The Total Solutions power generation platform was expanded, focusing on integrated solutions for power generation and infrastructure needs [9][10] Market Data and Key Metrics Changes - The company is positioned to capitalize on a generational investment cycle in critical infrastructure, driven by increased demand for resilient grids and expanded generation capabilities [9][10] - The renewable energy and battery storage sectors are experiencing significant growth, with a strong backlog in solar and storage projects [68] Company Strategy and Development Direction - Quanta Services aims to deliver certainty to customers, invest in talent and technology, and expand addressable markets through disciplined strategic growth [10][14] - The integrated solution-based model differentiates Quanta, combining craft labor with engineering and technology expertise [8][9] - The company is focused on building long-term partnerships rather than traditional contractor relationships, enhancing customer collaboration [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving record backlog and double-digit earnings per share growth in 2026, supported by strong end-market momentum and consistent execution [10][14] - The management highlighted the importance of addressing customer needs and adapting to market changes, particularly in the energy and infrastructure sectors [9][10] Other Important Information - The company issued $1.5 billion in notes to enhance liquidity and recapitalize the balance sheet, benefiting from a recent ratings upgrade [12][13] - The acquisition of Dynamic Systems is expected to enhance mechanical construction capabilities and expand service offerings [117] Q&A Session Summary Question: Potential partnership with AEP for high-voltage transmission - Management confirmed ongoing collaboration with AEP but noted that none of the 765 capabilities are currently in backlog, with discussions ongoing [19][20] Question: Execution risks for larger Total Solutions jobs - Management emphasized a collaborative approach to mitigate risks and ensure cost certainty for clients, stating that they are not taking risks on large projects [25][26] Question: Strategy between recurring services and discrete EPC projects - Management reiterated that the core strategy remains focused on craft skills and solution-based approaches, with a balance between base business and larger projects [30][31] Question: Expansion into data center construction - Management expressed confidence in their ability to build comprehensive data center solutions, leveraging existing capabilities and partnerships [42][43] Question: Joint venture with Zachry for power generation - Management clarified that the joint venture is a strategic move to expand service offerings while managing risks collaboratively [48][51] Question: Market opportunity for combined cycle gas plants - Management indicated a selective approach to market opportunities, focusing on total solutions rather than pursuing all available projects [56][57] Question: Demand for natural gas infrastructure - Management acknowledged ongoing discussions about infrastructure needs but emphasized a cautious approach to new projects [60][62] Question: Solar and storage backlog increase - Management confirmed significant growth in the solar and storage backlog, driven by strong demand and the ability to deliver integrated solutions [68][69] Question: Dynamic Systems acquisition integration - Management reported positive integration outcomes from the Dynamic Systems acquisition, enhancing mechanical construction capabilities [117][118]

Core Insights - Talen Energy Corporation is identified as a promising stock, particularly following its collaboration with Eos Energy Enterprises to enhance energy storage capacity in Pennsylvania, addressing the rising electricity demand driven by AI and cloud computing [1][3]. Company Overview - Talen Energy Corporation operates as an independent power producer, generating and selling electricity, capacity, and ancillary services in the US wholesale power markets [4]. - Eos Energy Enterprises specializes in designing, developing, and manufacturing energy storage solutions for various applications, including utility-scale and commercial sectors [4]. Collaboration Details - The partnership between Talen Energy and Eos Energy focuses on utilizing Eos's American-made Z3 battery technology, a zinc-based energy storage system, to improve grid reliability and support the clean energy transition in Pennsylvania [2][3]. - The collaboration aims to develop multiple energy storage projects near Talen's existing assets, including operational and retired fossil fuel sites, with a target capacity of multiple gigawatt-hours to meet the increasing electricity demand [3].

Group 1 - Constellation Energy Corporation (NASDAQ:CEG) is recognized as a promising stock to buy, with analysts raising price targets significantly [1][3] - Mizuho analyst Anthony Crowdell increased the price target for Constellation Energy to $390 from $335 while maintaining a Neutral rating [1] - Wells Fargo initiated coverage with an Overweight rating and a price target of $478, citing rising momentum driven by near-term catalysts and a favorable supply-demand dynamic in the power market [2] Group 2 - JPMorgan also raised its price target for Constellation Energy to $422 from $391, keeping an Overweight rating ahead of the company's Q3 2025 earnings report [3] - Constellation Energy operates in the US energy market, providing products and services across five segments: Mid-Atlantic, Midwest, New York, ERCOT, and Other Power Regions [4]

Core Insights - The article discusses the positive developments surrounding Vistra, particularly the Comanche Peak Deal, which has led to raised guidance and regulatory approvals, indicating a strong potential for future growth [1]. Company Developments - Vistra is in the process of signing hyperscaler-focused nuclear Power Purchase Agreements (PPAs), which is a significant step for the company [1]. - The Comanche Peak Deal is highlighted as a key milestone that has contributed to the company's improved outlook [1]. Financial Performance - The article suggests that the recent developments have positively impacted Vistra's financial guidance, although specific numerical data is not provided [1]. Market Trends - There is an emphasis on the importance of macroeconomic trends and corporate earnings in evaluating investment opportunities, which aligns with the broader market context [1].

Core Insights - The article discusses the investment potential of Vistra (VST), highlighting recent developments such as the Comanche Peak Deal, raised guidance, regulatory approvals, and progress on debt management [1]. Company Developments - Vistra is in the process of signing hyperscaler-focused nuclear Power Purchase Agreements (PPAs), which is seen as a critical step for future growth [1]. - The company has raised its guidance, indicating positive expectations for its financial performance [1]. - Regulatory approvals have been obtained, which may facilitate further operational and financial advancements for Vistra [1]. Financial Analysis - The article emphasizes the importance of quantitative research, financial modeling, and risk management in evaluating Vistra's investment potential [1]. - The focus on equity valuation and market trends is aimed at uncovering high-growth investment opportunities within the energy sector [1].