NRG Energy (NRG): A Bull Case Theory
An aerial view of the energy producing facility, highlighting its potential of providing utilities to the public.
NRG Energy, a major retail energy provider in the U.S., serves 6 million customers and has expanded its home services footprint by acquiring Vivint Smart Home in 2023, adding 2 million customers. The company is also one of the largest independent power producers in the U.S., with 13 gigawatts of power generation capacity from coal and natural gas, primarily in Texas. With the acquisition of LS Power, NRG will gain 13 gigawatts of gas-fired power plants, mostly in the eastern U.S., potentially enabling it to power 19.5% of U.S. households. This move is significant as NRG's power generation capabilities rely on natural gas and coal, which are still the backbone of the power grid, unlike wind and solar energy, which can be unreliable.
The company's acquisition of LS Power is expected to be a defining moment, but its market cap of $31 billion and a P/E of 26 already price in much of the future growth. NRG has a history of returning capital to shareholders aggressively, with a plan to buy back stock at a rate of $1 billion a year. However, the company's 2023 performance shows concerning signs, including negative cash from operations and free cash flow, despite which it still bought back $1.17 billion in common stock and paid out $381 million in dividends. The issuance of $635 million in preferred stock to fund these activities is also seen as a negative point, as it resembles taking on debt to return capital to shareholders.
Despite these concerns, NRG is set to become a crucial player in the U.S. power grid at a time when demand for electricity is expected to increase due to AI. The company's current stock performance and valuation present an interesting investment opportunity, although it may not be perfect due to the noted concerns about its financial management and capital allocation decisions. The potential for NRG to become a backbone of the power grid, combined with its aggressive capital return strategy, makes it a stock worth considering, but with caution due to the risks involved.
Previously we covered a bullish thesis on Vistra Corp. by desperate-pleasures in March 2025, which highlighted the company's strategic positioning to meet AI-driven energy demand, strong cash flow, and undervaluation due to market mispricing. The company's stock price has appreciated approximately by 53.73% since our coverage. This is because the thesis played out. The thesis still stands as AI energy demand continues to rise. David shares a similar view but emphasizes NRG's inorganic growth via acquisitions.
NRG isn't on our list of the 30 Most Popular Stocks Among Hedge Funds. While we acknowledge the risk and potential of NRG as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article was originally published at Insider Monkey.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
25 minutes ago
- Yahoo
Where Will C3.ai Stock Be in 1 Year?
Key Points endured some tough growing pains over the past few years. But its revenues are still rising and its gross margins are stabilizing. It could climb higher over the next 12 months, but it should remain below its IPO price. 10 stocks we like better than › (NYSE: AI) was once a hot artificial intelligence (AI) stock. Back in December 2020, it more than quadrupled from its initial public offering (IPO) price of $42 to a record high of $177.47 in just two weeks. At the time, investors were impressed by its rapid growth rates, catchy ticker symbol, and the fact that it was led by Tom Siebel, who sold his previous company -- Siebel Systems -- to Oracle for $5.8 billion in 2006. The buying frenzy in meme and growth stocks amplified those monstrous gains. But today, stock trades at about $26. It fizzled out as its growth cooled off, it racked up steep losses, and rising interest rates popped its bubbly valuations. It hasn't traded above its IPO price since last December, and it's declined roughly 12% over the past 12 months. Let's see where it might be headed over the next year. How does make money? AI modules can be plugged into an organization's existing software infrastructure to ingest and analyze a wide range of data. Those modules can also be run as stand-alone services. Its modules are often used to detect safety issues, fraudulent transactions, and operating inefficiencies. It mainly serves government clients and large enterprise customers across the energy, industrial, and financial sectors, and its top customer is the energy technology giant Baker Hughes. initially only offered subscriptions, but it rolled out consumption-based fees in late 2022 to attract more customers as rising interest rates stirred up some fierce macro headwinds. That move reduced its recurring revenues and the stickiness of its ecosystem, but it broadened its market by reaching smaller and more budget-conscious customers. Why were its last few years challenging? In fiscal 2023 (which ended in April 2023), revenue only rose 6% as the competitive headwinds, a challenging macro environment, and the cannibalization of its subscriptions with its consumption-based fees throttled its growth. Its adjusted gross margin also dipped 2 percentage points to 77% as its pricing power waned. However, revenue rose 16% in fiscal 2024 and 25% in fiscal 2025. That acceleration was driven by its new federal contracts; fresh partnerships with Microsoft, Amazon Web Services (AWS), and McKinsey; and its rollout of more modules for generative AI applications. Its adjusted gross margin dropped another 8 percentage points to 69% in fiscal 2024 as it relied on more low-margin pilot trials to attract more customers. But in fiscal 2025, that figure expanded to 70% as it converted more of those pilot programs into full-priced deployments. It also expanded its higher-margin subscriptions again. What happened to over the past year? Over the past year, year-over-year revenue growth stabilized above 20% as its adjusted gross margins improved. That recovery was driven by declining interest rates, the growth of the AI market, and its broadening customer base. Metric Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 Revenue growth (YOY) 20% 21% 29% 26% 26% Adjusted gross margin 69% 68% 70% 70% 71% Data source: YOY = year over year. More importantly, renewed its joint venture with Baker Hughes, which accounted for more than 30% of its revenue, for an additional three years. That renewal allayed some bearish concerns about abruptly losing its top client before it could diversify its customer base. What will happen over the next year? expects its revenue to rise 15%-25% in both the first quarter of fiscal 2026 and the full year. Analysts expect its revenue to increase 20% to $465 million for the full year. With a market cap of $3.5 billion, stock doesn't seem that expensive at 8 times this year's sales. But it isn't expected to break even anytime soon. At the beginning of fiscal 2024, it abandoned its near-term goal of turning profitable on an adjusted basis by the end of the year in favor of ramping up its investments in its AI-oriented modules. For fiscal 2026, expects to post an adjusted operating loss of $65 million-$100 million. That wouldn't be much of an improvement from its adjusted operating loss of $88 million in fiscal 2025. It will also likely continue to spend a lot of cash on its stock-based compensation expenses, which rose 7% to $231 million in fiscal 2025 and consumed 59% of its revenue. On a generally accepted accounting principles (GAAP) basis, analysts expect its net loss to widen from $288 million in fiscal 2025 to $302 million in fiscal 2026. For fiscal 2027, analysts expect its revenue to rise 19%. Assuming it meets those expectations and still trades at 8 times its forward sales, its stock price could rise about 26% to $33 over the next 12 months. That would be a decent gain, but it would remain far below its IPO price and likely underperform some of the market's higher-growth AI plays. Do the experts think is a buy right now? The Motley Fool's expert analyst team, drawing on years of investing experience and deep analysis of thousands of stocks, leverages our proprietary Moneyball AI investing database to uncover top opportunities. They've just revealed their to buy now — did make the list? When our Stock Advisor analyst team has a stock recommendation, it can pay to listen. After all, Stock Advisor's total average return is up 1,060% vs. just 179% for the S&P — that is beating the market by 881.02%!* Imagine if you were a Stock Advisor member when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $679,653!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,046,308!* The 10 stocks that made the cut could produce monster returns in the coming years. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 15, 2025 John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Leo Sun has positions in Amazon. The Motley Fool has positions in and recommends Amazon, Microsoft, and Oracle. The Motley Fool recommends and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. Where Will Stock Be in 1 Year? was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
25 minutes ago
- Yahoo
EXL announces availability of EXL Code Harbor™ and EXL Smart Agent Assist™ in the new AWS Marketplace AI Agents and Tools category
NEW YORK, July 16, 2025 (GLOBE NEWSWIRE) -- EXL (NASDAQ: EXLS), a global data and AI company, announced the availability of its Code Harbor™ ('Code Harbor') and Smart Agent Assist™ ('Smart Agent Assist') solutions in the new AI Agents and Tools category of AWS Marketplace. Customers can now use AWS Marketplace to easily discover, buy, and deploy AI agents solutions, including EXL's AI-powered code migration and real-time conversational insights and agent assist solutions, using their AWS accounts, accelerating agentic AI integration initiatives. EXL's Code Harbor helps organizations streamline the code migration process by orchestrating multiple AI agents including those for code comprehension, data cleaning, data lineage, code conversion and code validation, resulting in accelerated delivery, reduced costs, and higher accuracy. EXL's Smart Agent Assist enhances customer service operations by orchestrating multiple intent recognition AI agents with real-time conversational insights, automated call summaries and smart audits that enable customer service centers to deliver personalized and efficient experiences in addition to improving first call resolution, boosting agent productivity and reducing average handling time. 'By offering Code Harbor and Smart Agent Assist in AWS Marketplace, we're providing customers with a highly scalable, efficient and compliant way to embed EXL's agentic AI solutions into their workflows,' said Anand 'Andy' Logani, executive vice president and chief data and AI officer at EXL. 'Our customers in insurance, banking and finance, healthcare, retail and other industries are already using these capabilities to improve workflows, reduce costs and deliver better customer experiences, demonstrating the real-world value of our agentic AI solutions.' Based on internal studies, Code Harbor helps customers reduce code migration time on average by 35% over manual migrations, while reducing code compute time and memory usage generally by 25% and driving a 10% reduction in query plans. Additionally, analysis shows that Smart Agent Assist delivers typically a 12-15% reduction in contact center agent handling time, enhancing overall resource utilization and minimizing after-call work, ordinarily leading to a 20% decrease in service costs. With the availability of AI Agents and Tools in AWS Marketplace, customers can significantly accelerate their procurement process to drive AI innovation, reducing the time needed for vendor evaluations and complex negotiations. With centralized purchasing using AWS accounts, customers maintain visibility and control over licensing, payments, and access through learn more about Code Harbor and Smart Agent Assist in AWS Marketplace, visit To learn more about the new Agents and Tools category in AWS Marketplace, visit About EXL EXL (NASDAQ: EXLS) is a global data and AI company that offers services and solutions to reinvent client business models, drive better outcomes and unlock growth with speed. EXL harnesses the power of data, AI, and deep industry knowledge to transform businesses, including the world's leading corporations in industries including insurance, healthcare, banking and capital markets, retail, communications and media, and energy and infrastructure, among others. EXL was founded in 1999 with the core values of innovation, collaboration, excellence, integrity and respect. We are headquartered in New York and have approximately 60,000 employees spanning six continents. For more information, visit Cautionary Statement Regarding Forward-Looking Statements This press release contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995. You should not place undue reliance on those statements because they are subject to numerous uncertainties and factors relating to EXL's operations and business environment, all of which are difficult to predict and many of which are beyond EXL's control. Forward-looking statements include information concerning EXL's possible or assumed future results of operations, including descriptions of its business strategy. These statements may include words such as 'may,' 'will,' 'should,' 'believe,' 'expect,' 'anticipate,' 'intend,' 'plan,' 'estimate' or similar expressions. These statements are based on assumptions that we have made in light of management's experience in the industry as well as its perceptions of historical trends, current conditions, expected future developments and other factors it believes are appropriate under the circumstances. You should understand that these statements are not guarantees of performance or results. They involve known and unknown risks, uncertainties and assumptions. Although EXL believes that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect EXL's actual financial results or results of operations and could cause actual results to differ materially from those in the forward-looking statements. These factors, which include our ability to maintain and grow client demand, our ability to hire and retain sufficiently trained employees, and our ability to accurately estimate and/or manage costs, rising interest rates, rising inflation, recessionary economic trends, and ability to successfully integrate strategic acquisitions, are discussed in more detail in EXL's filings with the Securities and Exchange Commission, including EXL's Annual Report on Form 10-K. You should keep in mind that any forward-looking statement made herein, or elsewhere, speaks only as of the date on which it is made. New risks and uncertainties come up from time to time, and it is impossible to predict these events or how they may affect EXL. EXL has no obligation to update any forward-looking statements after the date hereof, except as required by applicable law. ContactsKeith Investor RelationsJohn Kristoff+1 212 209 4613IR@
Business Wire
27 minutes ago
- Business Wire
Adastra Announces Availability of Three Agentic AI Offers in the New AWS Marketplace AI Agents and Tools Category
TORONTO--(BUSINESS WIRE)--Adastra Corporation, a leading provider of artificial intelligence and data analytics services, today announced the availability of three new offers – Agentic AI on AWS, ERP Order Tracking & Supplier Automation and Sales Data Navigator for CRM & Marketing Insights – in the new AI Agents and Tools category of AWS Marketplace. Customers can now use AWS Marketplace to easily discover, buy, and deploy Adastra's offers using their AWS accounts, accelerating AI agent and agentic workflow development. Adastra's Agentic AI offers accelerate business performance with AI, helping automate tasks, provide instant access to critical ERP and CRM data, and support secure, scalable AI agent deployment. 'Agents are taking over what AI previously couldn't do – the ability to act,' says Ondřej Vaněk , Chief AI Officer, Adastra AI. Adastra's Agentic AI offers deliver essential capabilities—including rapid AI adoption through reusable, low-code agents; instant access to ERP, CRM, and marketing data via natural language; and enterprise-grade governance to ensure secure, compliant, and scalable AI use across business functions. "We're excited to offer our Agentic AI offers in the new AWS Marketplace AI Agents and Tools category," said Katya Dunets, Head of North American Presales, AWS at Adastra. "AWS Marketplace allows us to provide customers with a streamlined way to access our offers, helping them boost productivity, gain instant access to information, and free up employee time for business-generating activities.' With the availability of AI Agents and Tools in AWS Marketplace, customers can significantly accelerate their procurement process to drive AI innovation, reducing the time needed for vendor evaluations and complex negotiations. With centralized purchasing using AWS accounts, customers maintain visibility and control over licensing, payments, and access through AWS. To learn more about Agentic AI in AWS Marketplace, visit To learn more about ERP Order Tracking & Supplier Automation in AWS Marketplace, visit To learn more about Sales Data Navigator for CRM & Marketing Insights in AWS Marketplace, visit About Adastra Adastra is a global leader in AI and data-driven transformation, helping organizations lead with artificial intelligence—responsibly, strategically, and at scale. With over 25 years of experience, Adastra empowers enterprise clients to unlock business value through data innovation, operational excellence, and smart customer engagement. Trusted by some of the world's most prominent brands, Adastra delivers end-to-end solutions grounded in thoughtful strategy, robust governance, and deep technical expertise. From defining vision to ensuring execution, Adastra guides organizations through every stage of their AI, data and cloud journey—building future-ready capabilities and delivering measurable, lasting impact. Adastra serves clients across key industries including financial services, automotive, manufacturing, technology, media and telecom (TMT), healthcare, retail, and professional services. The company employs more than 2,000 professionals across North America, Europe, and Asia.
