The world is about to enter an unprecedented period of energy demand growth. Artificial intelligence has immense power needs. Couple that with other demand catalysts, such as electric vehicles and advanced manufacturing facilities, and the world will need much more energy in the coming decades. Electricity demand in the U.S. alone could grow 60% by 2045, six times faster than it has grown over the past 20 years.
The coming power surge is driving me to boost my energy stock investments. Here are three I'd buy with my next $1,000.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Bloom Energy (NYSE: BE) is a leading developer of advanced fuel cells. The company's technology is rapidly becoming the go-to choice for powering data centers. Data center developers can't get enough of its fuel cells. Global investment firm Brookfield Asset Management recently expanded its AI infrastructure partnership with Bloom Energy to $25 billion, a five-fold increase from its initial $5 billion partnership last October. That follows a similar expansion by cloud giant Oracle, which will now deploy up to 2.8 gigawatts of Bloom's fuel cells at its data centers to accelerate its AI infrastructure build-out.
These and other deals are powering robust growth for Bloom Energy. Its revenue surged more than 130% in the first quarter to over $750 million, along with a significant improvement in profit (operating income increased $91.3 million to $72.2 million). Bloom now expects to deliver 80% revenue growth this year, up from its prior guidance of 60%. It should continue growing rapidly as more companies deploy its on-site power solutions. Despite robust growth, Bloom Energy shares are currently 40% below their recent high, making its valuation much more attractive.
Brookfield Renewable (NYSE: BEPC)(NYSE: BEP) is a leading global renewable energy platform. It operates hydro, wind, solar, and storage assets secured by long-term contracts with inflation escalators. That enables it to generate stable, growing cash flow to support its more than 4.5% yielding dividend.
The company expects to deploy $9 billion to $10 billion of capital over the next five years to grow its global platform. It plans to invest around $850 million per year to develop additional renewable energy assets, with the remaining funds allocated to acquisitions. These investments, along with rising power prices, should drive annual growth in funds from operations per share of more than 10%. That should support continued dividend growth of 5% to 9% per year. With its share price down nearly 25%, Brookfield has high-powered total return potential.
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