Solaris Energy Infrastructure (SEI) is expected to continue to expand capacity despite facing a tight supply chain in the near term, Morgan Stanley analysts said in a Thursday note.

Analysts said that the company will reach 3.2 gigawatts delivered by 2029, with roughly 1 gigawatt under shorter-term contracts or available for new contracts.

Morgan Stanley said that Solaris' three long-term contracts with hyperscalers significantly enhance its credit profile and improve financial flexibility.

Analysts said that Solaris' Q3 guidance is "conservative" and expects the company to beat it.

Morgan Stanley retained an overweight rating on the stock and increased its price target to $90 from $81.

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