Will SEI Hold Key Support or Drop to New Lows? Here's What to Watch

Solaris Energy Infrastructure, Inc. (NYSE:SEI) has seen significant price movement in early 2026, with its shares rising by 14.64% between December 30, 2025, and January 6, 2026. This performance positioned it among the week's top-gaining energy stocks. Analysts have responded to this momentum, with Northland raising the price target for SEI from $61 to $70. The firm maintains an 'Outperform' rating, reflecting optimism about the company's potential in 2026.

The stock's recent gains coincide with a major business development. SEI announced it has secured an additional 500 MW of capacity, bringing its total generation capacity to approximately 2.2 gigawatts by early 2028. This expansion is expected to add 900 MW of capacity, which analysts believe will likely be contracted in the first half of 2026. Northland highlighted that the company is the 'leading off-grid power provider to data centers,' noting its clear growth intentions.

SEI has also taken a step forward in its data center operations. It began providing primary power to a second data center in the third quarter of 2025. Analysts see this as a key milestone, as it demonstrates the company's ability to scale. However, this growth must be weighed against risks such as permitting delays, land acquisition, and infrastructure buildout challenges.

Why Did This Happen?

The recent price surge and analyst optimism stem from SEI's expanding role in data center power solutions. The company's modular and scalable power generation systems are positioned to meet growing demand for grid resiliency and electrification in the AI-driven economy. This has led to an 83.5% total shareholder return over the past year and a very large 5-year total return, indicating strong investor confidence in its long-term potential.

Northland's price target of $70 represents an upside of over 32% from the current share price. The analyst labeled SEI a '2026 Top Pick', emphasizing its potential to convert uncontracted capacity into long-term deals. This optimism is based on SEI's track record of executing large-scale energy projects and its leadership in off-grid power solutions.

How Did Markets React?

The market has priced in a significant portion of SEI's growth story, reflected in its current P/E ratio of 71.1x. This is well above the US Energy Services average of 20.1x, suggesting that investors are valuing the company on the expectation of continued high growth. However, this valuation also means the bar for earnings performance is higher than typical energy services firms.

At a share price of $52.9, SEI is viewed by some as 18.1% undervalued relative to a projected fair value of $64.60. This valuation implies strong future fundamentals, including revenue growth, margin expansion, and a premium earnings multiple. But the market's optimism hinges on SEI's ability to convert its uncontracted capacity into long-term deals without cost overruns or supply chain disruptions.

What Are Analysts Watching Next?

Analysts are closely monitoring SEI's capacity utilization and project execution efficiency. The company has 900 MW of open capacity that could be contracted in the coming year, but success depends on factors such as permitting timelines and infrastructure buildout. If SEI can execute these projects on schedule, it could reinforce the growth narrative and justify a premium valuation.

In addition to capacity conversion, analysts are watching SEI's margins. The company's ability to maintain or expand its profit margins will depend on its cost control and supply chain management. Any delays or cost increases could erode investor confidence and cause a reassessment of the company's valuation.

Bobby Brooks from Northland Securities maintains a 'Buy' rating on SEI with a $70 price target. According to TipRanks.com, Brooks is a 5-star analyst with a strong track record in the Industrial Goods sector. The analyst consensus is currently a 'Strong Buy', with an average price target of $65.17. This consensus reflects broad support for SEI's long-term growth story.

Investors must also consider the broader market context. While SEI's energy infrastructure model is unique, it is part of a competitive sector with varying valuations. For example, Devon Energy (DVN) and Range Resources (RRC) have received conflicting analyst ratings, highlighting the sector's volatility and the importance of company-specific fundamentals.

In conclusion, Solaris Energy Infrastructure is benefiting from strong growth in the data center power market and a favorable analyst outlook. However, investors should remain cautious about the company's high valuation and execution risks. The key questions will be whether SEI can convert its open capacity into contracts and whether it can maintain its margins as it scales. For now, the stock appears to be trading at a discount to its projected fair value, but this depends on the successful execution of its strategic plans.