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Matt Phillips1/26/26

Booz Allen Hamilton dives after Treasury Department cancels contracts over leak

Large defense-centric government consulting firm Booz Allen Hamilton dove Monday after the US Treasury Department announced it was canceling all its contracts with the firm, citing a former employee who pleaded guilty to leaking tax information about President Donald Trump and thousands of the country’s richest people to media outlets like The New York Times and Propublica between 2018 and 2020.

The man, Charles Edward Littlejohn, was sentenced to five years in prison in January 2024.

The US government accounts for nearly all revenues generated by Booz Allen, with more than 70% coming from defense and intelligence clients as of its most recent earnings report. The remainder comes from civil clients, a division that includes the Treasury.

The Treasury Department said it canceled all 31 contracts it had with the company, which were worth a total of $21 million.

“Booz Allen failed to implement adequate safeguards to protect sensitive data, including the confidential taxpayer information it had access to through its contracts with the Internal Revenue Service,” Treasury Secretary Scott Bessent said in a statement.

Just last week, management had raised its annual profit outlook after reporting better-than-expected third-quarter earnings.

Treasury Cancels Contracts with Booz Allen Hamilton

Treasury Cancels Contracts with Booz Allen Hamilton

The man, Charles Edward Littlejohn, was sentenced to five years in prison in January 2024.

The US government accounts for nearly all revenues generated by Booz Allen, with more than 70% coming from defense and intelligence clients as of its most recent earnings report. The remainder comes from civil clients, a division that includes the Treasury.

The Treasury Department said it canceled all 31 contracts it had with the company, which were worth a total of $21 million.

“Booz Allen failed to implement adequate safeguards to protect sensitive data, including the confidential taxpayer information it had access to through its contracts with the Internal Revenue Service,” Treasury Secretary Scott Bessent said in a statement.

Just last week, management had raised its annual profit outlook after reporting better-than-expected third-quarter earnings.

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Matt Phillips16h

Constellation, Talen, and NRG surge as BNP analysts see “golden (AI)ge” ahead for them

Power producers Talen Energy, Constellation Energy, and NRG jumped Wednesday, benefiting in part from a rosy write-up by analysts at BNP Paribas, who launched coverage of all three at “outperform” and argued that the AI energy trade — a big AI-related winner in recent years that has lagged a bit recently — is due for a second wind.

That view was in a broad note on the independent power producer segment of utilities industry that the analysts published Wednesday, titled “The Golden (AI)ge of IPPs.”

Here’s the gist of it:

US independent power producers (IPPs) have lagged the AI basket for 6+ months, after garnering much attention in 2023-1H25. Investors are caught up in the minutia of perceived headwinds: underwhelming pace of power purchase agreement deals, distributed behind-the-meter solutions stealing the ‘time-to-power’ edge, pressure for data centers to bring generation and not tighten the grid, etc.

And yet, as we demonstrate, despite all this noise, the wave of rising load is at the cusp of an acceleration that will nonetheless overwhelm new supply—well into the 2030s, in our view. Hop on or risk missing the resurgent AI trade this decade.

BNP’s price targets for the stocks — Constellation ($407), NRG ($232) and Talen ($549) — implied gains of 32%, 50%, and 68% respectively. (Though today’s gains would reduce those potential upside targets somewhat for new buyers.)

US independent power producers (IPPs) have lagged the AI basket for 6+ months, after garnering much attention in 2023-1H25. Investors are caught up in the minutia of perceived headwinds: underwhelming pace of power purchase agreement deals, distributed behind-the-meter solutions stealing the ‘time-to-power’ edge, pressure for data centers to bring generation and not tighten the grid, etc.

And yet, as we demonstrate, despite all this noise, the wave of rising load is at the cusp of an acceleration that will nonetheless overwhelm new supply—well into the 2030s, in our view. Hop on or risk missing the resurgent AI trade this decade.

BNP’s price targets for the stocks — Constellation ($407), NRG ($232) and Talen ($549) — implied gains of 32%, 50%, and 68% respectively. (Though today’s gains would reduce those potential upside targets somewhat for new buyers.)

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