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OESX rallies 17% on a second Microsoft data center order - up more than 180 % in a little over a month
https://preview.redd.it/nihaqpuwgboh1.png?width=1024&format=png&auto=webp&s=4e2a27af6ce4bda2901a67a2e6ac63dc5579480c
Positions: doubled up. 840 stocks now. Still small, Im not selling for years.
TLDR: Orion (OESX) announced this morning that the same hyperscaler that placed the first multimillion dollar order in June just placed a second one, for a second building, three months later. Orion wont name the customer, they only say its a Fortune 20 company. I will name it. Its Microsoft. And Microsoft has 15 more buildings approved on that same campus.
Fifth post on this one. [Post 1](https://www.reddit.com/r/smallstreetbets/comments/1uj7hef/orion_energy_systems_oesx_dd/) was the original DD back when this was a 50 million company nobody looked at. [Post 2](https://www.reddit.com/r/smallstreetbets/comments/1vgbkaz/orion_energy_systems_oesx_rallies_60_after/) was the Q1'27 print where the margin held. [Post 3](https://www.reddit.com/r/smallstreetbets/comments/1vixkno/oesx_the_70m_company_making_led_lightning_for_ai/) was the data center math. [Post 4](https://www.reddit.com/r/smallstreetbets/comments/1vy70hl/oesx_up_another_20_today_and_a_director_just/) was the director buying at 18.96 after the run. This one is about who the customer actually is, because if Im right about that, it changes everything, and only to the upside. The whole story goes from one small company with a nice new product to the lighting vendor for the biggest AI buildout on the planet.
So the press release this morning says Orion got a second deployment of the MPHL2 for one of the worlds largest data center operators, multimillion dollar again, and Washlow says the customer was so happy with the first one that theyre already putting them on a second facility only three months later. She also calls them a Fortune 20 global enterprise, which is the thing that gave it away for me.
Because in the Global 500 there are only three hyperscalers inside the top 20, Amazon at 1, Alphabet at 8 and Microsoft at 18. If your customer was Amazon or Google you would say Fortune 10 as nobody undersells their customer in a press release. Fortune 20 is what you say when they sit at 18.
Then theres the geography. Orion builds everything in Manitowoc, Wisconsin, and two hours south of there Microsoft just finished Fairwater in Mount Pleasant, a 315 acre 1.2 million square foot AI facility that Nadella keeps calling the most powerful AI datacenter in the world. That building went live in April and Microsoft announced it done on June 23. Orion announced their first data center order in June.
And now theyre building a second identical one right next door, 4 billion dollars, done by 2028, and Orion announces a second order for a second facility three months after the first. Same campus, same building design, same fixture. Nobody has confirmed anything, but as far as Im concerned its Microsoft and Im writing the rest of this post as if it is.
The reason the second order matters more than the first is pretty simple. The first order from a hyperscaler can easily be a test, one building to see if the fixture does what Orion says it does, if it shows up on time, if the efficiency numbers hold. Ordering again three months later means it did. Thats not Microsoft trying something out anymore, thats Microsoft having found their lighting vendor.
Think about who this customer is for a second. Getting Microsoft to buy anything from a 50 million dollar company in Wisconsin is about the biggest stamp of approval you can get in tech, the only one bigger would be Apple, but Apple doesnt build AI data centers in Wisconsin. Microsoft has every supplier on the planet lined up outside the door and they went with Orion. Orions own release even says why the customer picked them, higher efficiency products and a supply chain that minimizes chokepoints, dwell times and market disruptions. Which is basically the whole thesis from my first post, just coming out of the customers mouth this time.
Now, the reason I doubled the position. Back in my first post I wrote that getting the first order was impressive but I was watching the reorder. Well, it came, and honestly for me this is about as good as it gets. Heres whats sitting behind it.
In January the Mount Pleasant village board approved Microsofts plans for 15 more data centers on two new campuses right next to the existing ones. Nine buildings on one lot, six on the other, close to 9 million square feet, taxable value north of 13 billion, unanimous vote, on land Microsoft already owns, and construction on the first nine is supposed to start this fall. So on that one site in Wisconsin Microsoft has building 1 done, building 2 under construction and 15 more approved. Seventeen in total.
Orion has orders for building 1 and building 2. Two for two. If the MPHL2 is on the spec for that building, and at this point I dont see how it isnt, then the next 15 arent a hope, theyre a queue. Multimillion is vague on purpose but I believe its somewhere between 3 and 4 million a building, and 15 more of those is 45 to 60 million from one campus. Orion did 86 million in revenue all of last year.
Mount Pleasant isnt even the only site. Microsoft calls the design Fairwater and theyre copying it around the country. Fairwater Atlanta went live in October, which was before the MPHL2 existed, so somebody else lit that one - and Microsoft did not reorder from whoever that was. Microsoft says theyve got multiple identical data centers under construction right now, all wired together into what they call an AI superfactory. Lights go in near the end of a build, not the start, so every one of those that finishes from here on is still up for grabs. And if Orion is already the vendor on the first two Fairwater buildings in Wisconsin, I dont really see why Microsoft would go shopping for a different one for the exact same building in a different state.
Then theres the money behind all of it. Microsofts spend on AI infrastructure is roughly doubling every year. 2024 was 56 billion. 2025 was 88 billion. 2026 was 145 billion. For 2027 analysts are at 220 to 260 billion. Somewhere around a third of that goes into actual buildings and everything physical inside them, and thats the pool Orion is now pulling from. Every single quarter Microsoft says the same thing, demand is ahead of supply and they cant build fast enough.
It doesnt stop at Microsoft either. Every hyperscaler and every one of their partners is building right now on the same brutal timelines, and Orion can now walk into any of those rooms with Microsoft on one side of the reference list and Home Depot on the other. Thats a company that has been lighting the biggest retailer in America for years and is now lighting the biggest AI buildout in the world. Good to go.
The tape. Up 15% today on the announcement, sitting around 27. In June when the CEO was buying her own stock at 9.50 and nobody cared as this was a 40 million company. Thats more than 200% in three months. Mcap now sits around 120 million. Every competitor in this space is still valued in the billions and none of them are lighting Microsoft. For all we know, they just might buy Orion outright.
Remember, all of this is on top of the core business, not instead of it. Fiscal 2026 was 86 million in revenue, gross margin reset to 32.6%, positive adjusted EBITDA every quarter, Home Depot as the anchor customer, LED lighting, EV charging, maintenance, and electrical contracting in 45 states. That business is guided to 95 to 97 million this year and grew 32% in Q1. The data center product is a brand new line on top of that, launched three months ago, and it already has two orders from Microsoft.
Three months ago they released a product. Today they have two orders from the second largest software company on earth, with 15 more buildings approved two hours down the road. Im staying put.
Not investment advice. As with all stocks, do your own work and research before going in.