Over the past two years, the hottest topic in the AI energy sector has undoubtedly been nuclear power. From OKLO to SMRs, from nuclear power plants to small modular reactors, almost every stock even remotely related to nuclear energy has been wildly pursued. But what if I told you that the biggest winner from AI’s future power shortage might not be these nuclear stars at all?
Nuclear power’s biggest advantage is its generation capacity, but its greatest weakness is time. It takes seven, ten, or even more years for a nuclear plant to go from approval to operation. The AI industry clearly won’t wait that long. So in the next few years, whoever can fill the power gap the fastest is most likely to become the real beneficiary of this AI wave.
Looking across the entire energy system, the only clean energy source that can currently scale up massively and be deployed quickly is solar power.
I’m sharing today is one of the few that is simultaneously betting on three major trends: AI power shortages, domestic manufacturing, and the solar resurgence$T1 ENERGY INC(TE)$
Next, I’ll show you how this company transformed from being abandoned by the market into a potential dark horse in the AI energy track, what its competitive advantages are, whether its latest earnings are truly delivering growth, and how much imagination space it still has as of 2026.
To understand TE’s current core logic, we first need to revisit its past story.
TE’s predecessor was a Norwegian battery company called Freyr. Back then, it was pitching the European energy storage battery story. However, because the technology couldn’t achieve large-scale commercialization and financing kept hitting roadblocks, its stock price plummeted. This caused heavy losses for many early investors. Two years ago, Freyr was seen by many as a classic “PPT company” (all talk, no substance).
But here’s the interesting part: At the end of 2024, the new management took over and made a decision that changed the company’s fate. They stopped stubbornly pursuing the battery business and pivoted directly to U.S. domestic photovoltaic manufacturing. This wasn’t a simple business adjustment—it was a complete rebirth.
Through a series of asset restructurings and acquisitions, the company transformed itself from a failed European battery project into a U.S. domestic solar manufacturer, precisely stepping into the industry direction that the U.S. most wants to support.
So what does TE actually make money from now?
After the transformation, TE holds two most important assets.
The first card is the G1 module factory that is already running at full production. Located in Texas, it has an annual capacity of 5 GW. In Q4 2025 alone, it produced 1.13 GW of modules and generated $358.5 million in revenue. This shows that the most dangerous capacity ramp-up phase for this factory is over. It is no longer just a cash-burning construction story, but a factory that has begun to continuously generate cash flow.
The second card is the G2 solar cell factory currently under construction, with a planned capacity of 2.1 GW, targeting commercial operation in Q4 2026.
At this point, many people might wonder: Solar modules and cells are produced everywhere in Asia at very low costs—why can TE compete?
The reason is that TE never intended to win on cost from the beginning. It focuses more on policy dividends and vertical supply chain integration.
You must understand one reality: What the U.S. really lacks is not module assembly factories (the technical barrier for assembly is not high, and many companies are already doing it). The real bottleneck is the core part of the module—the solar cells. Currently, although most U.S. module factories are built domestically, their core cells still rely on imports. The significance of the G2 project is to fill exactly this gap.
Once G2 is successfully put into production, TE will achieve a fully domestic closed-loop production from cells to modules. This step is critical because it not only means more controllable supply chains, but also allows TE to maximize enjoyment of the 48X manufacturing tax credit under the Inflation Reduction Act.
Many people think tax credits are just accounting games, but that’s not the case at all. The 48X credit can be directly converted into cash. For example, in December 2025, TE sold $160 million worth of 48X tax credits for $90 million in cash. In other words, these subsidies ultimately turn into real cash flowing into the company’s account—an advantage that overseas low-cost manufacturers simply cannot replicate. They may be able to lower costs further, but they cannot get U.S. government subsidies or enter the domestically supported manufacturing system.
So you’ll find that today’s TE is no longer the old unconvincing battery story. Its real investment thesis is betting on the major trend of localizing the U.S. photovoltaic supply chain.
After understanding TE’s transformation, let’s talk about a bigger question: Why do I believe that in the logic of exploding AI power demand over the next three years, the real winners may not be nuclear power, but solar?
Recently, you’ve probably seen many headlines: tech giants signing nuclear agreements one day, small modular reactors emerging the next, followed by talks of nuclear renaissance. It all sounds exciting, but when investing, we can’t just look at how good the story is—we must look at timing.
AI’s power shortage is not a problem for ten years from now; it has already begun.
First, nuclear power is of course great—stable, efficient, zero-carbon—but it is too slow. From approval and safety assessment to construction and grid connection, it takes at least five years, often ten or more. Many SMR projects are still in the commercial validation stage. Data centers, on the other hand, are built today, go online next year, and may need expansion the year after. They have no time to wait. Nuclear can solve future problems, but not the immediate ones.
Natural gas generation is stable and America has abundant resources, but its biggest bottleneck is not supply but transportation. Expanding power capacity requires building new pipelines, which often face lengthy approvals and environmental lawsuits in the U.S. It’s theoretically expandable but very difficult to scale quickly in practice.
As for the grid—many grid equipment companies have risen sharply recently. But remember, the grid is essentially just a highway for transporting electricity. No matter how wide the highway is, without new power plants feeding into it, the power shortage cannot be solved.
After eliminating all other options, the answer becomes increasingly clear: The only thing that can rapidly increase power generation is solar.
Solar has an irreplaceable advantage in the entire energy system—the fastest construction speed. A hundreds-of-MW-scale solar power station can go from groundbreaking to grid connection in just a few months (or one to two years at most). No complex approvals, no long construction cycles, and no waiting for next-generation technology. It is currently the only clean energy source that can keep pace with AI data center construction speeds.
This is also the biggest cognitive gap in the market right now. Many investors are focused on nuclear, but the reality over the next 3–5 years is likely that nuclear will handle the long term, while solar handles the present. The first batch of new electricity truly supporting AI computing power expansion will most likely come from solar.
And TE is smartest here: It is betting not only on the solar track, but on U.S. domestic solar manufacturing. To secure the fullest policy dividends, TE has signed long-term supply agreements with major U.S. players such as the polysilicon giant Hemlock, wafer manufacturer Corning, and steel frame supplier NextPower, minimizing overseas dependence in the supply chain as much as possible.
This means that while the entire U.S. is pushing for energy independence and industrial reshoring, TE is perfectly positioned at the intersection of policy, industry, and AI power demand.
Of course, after all the logic and storytelling, what ultimately determines whether a company is worth attention is its financials. Has TE’s fundamentals begun to deliver? From its latest earnings, I think the answer is yes.
To be honest, after this earnings report came out, the ones who probably felt bad weren’t investors, but those who had been shorting TE.
In the most recent quarter, TE achieved $177.6 million in revenue, up 232% year-over-year from $53.45 million. For a company that has just completed a strategic transformation, this growth is quite impressive.
More importantly, its profit side has reached a key inflection point. The company recorded its first-ever positive net profit from continuing operations of $3.9 million, compared to a $6.3 million loss in the same period last year. Although the profit scale is still small, it means TE has crossed the threshold from storytelling to actually making money.
Meanwhile, adjusted EBITDA reached $9.1 million, a record high and a swing from negative to positive. Gross margin also improved to around 17%.
Some may notice the company still reports an overall net loss of $21.4 million. This is mainly due to the impact of legacy businesses and discontinued operations. When focusing only on core continuing operations, profitability has clearly improved.
The reason for the rapid margin improvement is that the G1 factory has been successfully ramped up. Production reached approximately 683 MW in Q1, with both output and sales exceeding expectations. The most dangerous ramp-up phase is over, and the factory is entering the scale-effect release period.
Even more important than capacity growth is the change in sales model. In the past, TE relied heavily on spot market sales, with prices fluctuating and lacking pricing power. Now, as the U.S. domestic PV supply chain tightens, more customers are locking in capacity in advance. TE has shifted more contracts to fixed-margin and cost-plus contracts. This means the company can lock in profit margins even if international module prices continue to fluctuate.
In terms of orders, management disclosed that potential demand for 2027–2028 has already exceeded 100% of the total planned capacity of G1 and G2. The market’s concern is no longer whether there are orders, but whether the company can deliver on time.
G2’s construction is progressing smoothly according to plan. If it maintains this pace, with G1 at full production and G2 Phase 1 coming online, management expects annualized adjusted EBITDA to reach $375–450 million by 2027. If G1 and G2 are further expanded to a total of 13 GW, annualized EBITDA could reach $650–700 million.
The market may still be viewing TE through the old Freyr lens, but the financial data already shows it is turning into a real manufacturing company capable of generating cash flow.
For growth stocks, the most important value leap often happens at exactly this moment—when the market still sees it as a story, but it has already started making money.
As of June 2026, what kind of price is TE worth? To stay objective, I used a simple discounted cash flow model (12% discount rate, 3% perpetual growth rate).
I divide future development into three scenarios:
Base case (what the market is currently pricing): 2026 revenue reaches $1.3 billion, G2 launches on schedule, ramps up successfully, and annualized EBITDA hits the guided $300–450 million. Under this assumption, TE’s fair value is roughly $8–12. This explains why the stock has been trading in this range—the market has already priced in the successful landing of G2. Current prices are neither particularly cheap nor expensive.
Optimistic case (worth paying attention to): Further strengthening of U.S. domestic manufacturing protection policies, increased difficulty for overseas cells to enter the U.S. market, successful financing by TE, accelerated expansion of G1 and G2, and early achievement of the $650–700 million EBITDA target. In this scenario, the investment logic changes. Investors would see not just a PV manufacturer, but a scarce asset benefiting from AI power expansion, energy security, and manufacturing reshoring. A price of $15–20 would then be possible.
Downside risks: Financing difficulties causing G2 delays, significant dilution from convertible bonds, or major changes in U.S. domestic PV policy. In such cases, the stock could seek a lower safety margin.
TE is not a “buy and forget” stock. It remains a growth story that requires continuous tracking and validation—whether G2 can be successfully commissioned, whether the supply chain closed loop can be realized, and whether U.S. domestic PV manufacturing can continue to benefit from AI power demand.
Its biggest appeal is not what it has already proven, but what it is proving right now. While the market is still debating whether it is the old Freyr, it has already been quietly turning into a different company.
Many may wonder: If TE has truly transformed, with improving revenue and profits, why is the market still not giving it a higher valuation?
I believe the issue is not entirely with the company, but that the market lacks a strong enough catalyst yet. TE is still in a transition phase. Although it has a stably operating factory, the scale is not yet large enough to support a higher growth valuation. Institutions focus more on growth potential over the next 2–3 years.
It also faces the typical problem of mid-stage growth stocks—its size is still relatively small compared to leaders like First Solar, so it hasn’t entered the core allocation range for many large funds. Short-term capital also lacks continuous catalysts in the solar sector recently.
The market currently prefers more certain growth narratives (AI computing power, data centers, grid upgrades, nuclear). Solar, while having strong long-term logic, is still affected short-term by interest rates, policy, and industry supply-demand dynamics.
TE is currently at a critical turning point: It has completed the hardest part of the transformation but has not yet entered the widely recognized high-speed expansion phase. Capital markets usually don’t give full rewards in advance for potential future success—they prefer to reprice after growth is verified.
In the coming quarters, there are only two things truly worth watching:
Whether existing operations can continue generating stable cash flow.
Whether future expansion proceeds smoothly and delivers on growth expectations.
If these are progressively validated, the valuation logic for TE is likely to change. Until then, it remains a growth-stage company with relatively high volatility—opportunities and risks coexist. This is a common characteristic of all growth stocks.
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