The Energy Crisis Behind AI's 2026 Boom: Why FSLR and ANET Are Screaming Buys

2025-12-26 01:35:00

AI Hyperscalers Are Burning Through Power—And It’s Creating a Once-in-a-Generation Opportunity

Here’s what nobody’s talking about: the AI bubble isn’t running out of steam—it’s running out of electricity.

Amazon, Microsoft, Alphabet, and Meta are dropping $400 billion on capital expenditures in 2025 alone (up 300% since 2018), and the vast majority is going straight into data center infrastructure. Globally, companies will sink $7 trillion into data center capex by 2030. That’s insane. And it all needs power.

This energy supercycle is reshaping the entire investment landscape heading into 2026. Forget betting on AI chips alone—the real money is in the infrastructure and energy stocks powering the AI revolution.

Why 2026 Is Your Entry Point

Two macro forces are lining up perfectly. First, S&P 500 earnings are projected to grow 12.3% in 2026 (up from 11.4% in 2025), with tech earnings outpacing the broader market. Second, Wall Street is increasingly confident the Fed will cut rates again in 2026. Meanwhile, the brutal pullback in AI stocks over the last few months has created genuinely attractive entry points for quality names.

In other words: the timing is right, and the valuations don’t bite anymore.

First Solar: The Unsung Winner of America’s Energy Play

First Solar, Inc. (FSLR) is America’s largest domestically-headquartered solar manufacturer—a distinction that matters more than ever as reshoring becomes the real industrial policy.

Here’s the thing: everyone obsesses over nuclear energy as AI’s savior, but there’s a problem. Zero nuclear reactors are currently under construction in the U.S., and projects won’t break ground until the early 2030s. Solar, on the other hand, is available now and scaling fast.

In 2025 alone, solar is expected to account for over 50% of new U.S. utility-scale electricity-generating capacity, crushing wind (12%), battery storage (29%), and natural gas (7%). Why? Because AI hyperscalers like Microsoft and Amazon committed to massive solar projects in 2025, and they can’t wait for the nuclear pipeline to materialize. Months of construction delays matter when you’re powering trillion-dollar AI operations.

FSLR is positioned perfectly. The company is expanding manufacturing across Alabama, Louisiana, and beyond, with a stellar balance sheet ($13.5 billion in assets vs. $4.4 billion in liabilities) and an impressive booking backlog of 53.7 GW stretching through 2030.

The numbers justify the thesis:

Revenue projected to jump 22% in both FY25 and FY26, reaching $6.27 billion (vs. $4.21 billion in 2024)
Adjusted EPS set to expand 22% in 2025 and 59% in 2026 to $23.30/share (nearly double 2024’s $12.02)
Stock up 305% over 10 years, crushing both the S&P 500 (260%) and its industry peers (30%)

Yet here’s the kicker: FSLR trades 12% below its 2024 highs, at a massive 45% discount to its median valuation and 11.1X forward earnings (53% cheaper than the S&P 500). It’s basically a value trap that isn’t actually a trap. Brokerage recommendations? 24 of 33 are “Strong Buys.”

Arista Networks: The Picks and Shovels Play Every AI Bull Needs

Arista Networks (ANET) is the infrastructure play that works directly with the hyperscalers running the show. Microsoft and Meta are two of its largest clients, meaning ANET is buried deep in the plumbing keeping AI data centers running smoothly.

The company provides networking infrastructure for cloud, AI data centers, and enterprise routing. Since cloud computing exploded over the past decade, ANET has ridden that wave beautifully.

Revenue jumped from $361 million in 2013 to $7 billion in 2024 (32% average growth over the trailing four years). The projections are even spicier:

Sales expected to grow 27% in FY25 and 21% in 2026, reaching $10.73 billion
Revenue is doubling from 2022 to 2026 levels
Adjusted earnings growth: 27% and 15% respectively
By 2028, EPS could hit $4/share (vs. $2.27 in 2025)

And this is the wild part: ANET has skyrocketed roughly 2,800% over the past 10 years, outperforming five of the Mag 7 stocks (including Meta and Microsoft). It’s nearly neck-and-neck with Tesla’s returns.

Yet ANET still trades 20% below its highs and 33% under its average price target. After finding support near its 200-day moving average before Thanksgiving, the setup looks clean for a charge toward all-time highs once it breaks through early 2025 resistance levels.

The Macro Thesis: Buy the Dip, Ride the Supercycle

The AI revolution isn’t slowing down—it’s just entering a new phase where energy and infrastructure matter as much as compute. FSLR and ANET represent two sides of the same coin: one provides the power, the other provides the plumbing.

With months of uncertainty behind us, cleaner valuations ahead, and earnings tailwinds in 2026, this supercycle is just getting started. The stocks that power AI’s infrastructure aren’t sexy, but they’re essential—and that’s exactly why they’re about to print money.

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