Why Hallador Energy Stock Soared Today

Shares of Hallador Energy (NASDAQ: HNRG) popped on Tuesday as investors applauded the independent power producer's third-quarter profits.

As of 3:15 p.m. EST, Hallador's stock price was up more than 18%.

Image source: Getty Images.

Demand for energy is climbing rapidly

Hallador's revenue rocketed 40% higher year over year to $146.8 million. The gains were fueled by a 62% surge in coal sales, to $51.3 million, and a 29% jump in electric sales, to $93.2 million.

"Favorable summer weather, increased energy demand, and stronger natural gas prices provided a supportive backdrop that drove strong revenue at Hallador Power," CEO Brent Bilsland said in a press release.

These revenue gains, combined with effective cost control measures, helped to drive Hallador's profits sharply higher. The energy company's net income improved to $23.9 million, or $0.56 per share, up from $1.6 million, or $0.04 per share, in the third quarter of 2024.

Data centers' energy requirements should fuel continued growth

The artificial intelligence (AI) boom is creating a massive need for new power production. "We continue to see accelerating demand for accredited capacity, particularly from data center developers and load serving entities seeking dispatchable energy," Bilsland said.

To help meet the AI industry's unquenchable thirst for energy, Hallador filed an application with regulators to expand the generation capabilities at its Merom plant by 525 megawatts.

"If we are able to execute on these growth initiatives, adding roughly 50% additional generating capacity to the Merom site should provide exceptional value to our shareholders now and in the future," Bilsland said.

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.