In this article, we look at the 6 Best Geothermal Stocks To Invest In.
Geothermal Energy
Geothermal energy is a type of renewable energy source derived from the continuous heat generated within the Earth. This heat is produced by the slow decay of radioactive particles in the Earth’s core and can be used for various applications such as generating electricity and heating. Unlike other renewable energy sources such as wind and solar, geothermal energy is stable and offers a constant and reliable supply of power, regardless of weather conditions or time of day. Additionally, geothermal plants have a smaller land footprint compared to wind farms and solar panels, making them a more efficient choice for regions with high geothermal activity.
According to a report by Fortune Business Insights, the global geothermal energy market was valued at $70.14 billion in 2024 and is expected to grow from to $117.02 billion by 2032, with a CAGR of 6.61%. The Asia-Pacific region leads the geothermal industry and holds a market share of 37.14%. In the U.S., the focus is on maximizing renewable electricity output, particularly through Geothermal District Heating (GDH) systems. According to the GeoVision report, the U.S. has the potential to establish 17,500 GDH systems by 2050. Currently, only 23 systems are operational nationwide.
One of the key hurdles for geothermal development has been the high cost and risk of drilling and finding viable resources, companies are overcoming these challenges with innovative drilling techniques. These advancements enable the creation of geothermal wells without depending on a site’s natural permeability. Companies are also making drilling wells more cost-effective and sustainable by using a proprietary thermally conductive material and recycling water through a closed-loop system, which can extend the lifespan of its wells to over 30 years, making the technology attractive for long-term energy production.
Geothermal Energy Market Set for Growth
After years of slow development, geothermal energy is gaining serious momentum and investors are increasingly bullish on geothermal due to technological breakthroughs. Andrew Beebe, Managing Director at Obvious Ventures, believes the innovations now being developed will make geothermal energy more predictable, cost-effective, and scalable. As new technologies make geothermal wells more efficient, scalable, and cost-effective, the sector is poised for rapid growth, offering a unique opportunity for forward-thinking investors. Geothermal startups are proving that, with the right innovations, the industry can evolve and meet the world’s growing energy needs. The recent influx of capital is just the beginning, as investors see significant potential in a sector that has long been underutilized.
In the last six months alone, at least six geothermal startups have successfully closed funding rounds, one of the latest companies to benefit from this investment wave is XGS Energy, which announced an additional $20 million in Series A financing. The company’s closed-loop system for reusing water in injection wells is a key innovation, designed to make geothermal energy more efficient and scalable. This is part of a broader trend, with companies like Zanskar Geothermal & Minerals raising $30 million in Series B funding for AI-powered geothermal exploration, and Fervo Energy securing $244 million in Series D financing. The U.S. Department of Energy estimates that geothermal could provide 8.5% of the country’s electricity by 2050.
Geothermal’s ability to provide consistent power, combined with a smaller environmental footprint, makes it an attractive alternative to other renewable options. The U.S. has vast untapped potential in areas like Geothermal District Heating, with increased investment and innovation, the geothermal industry is well-positioned to contribute to the world’s renewable energy goals. With that in context let’s take a look at the 6 best geothermal stocks to invest in.
Photo by Mark Kuiper on Unsplash
Our Methodology
For this article, we used green energy ETFs plus online rankings to compile an initial list of 15 geothermal stocks. From that list, we shortlisted companies according to their hedge fund sentiment, which was taken from our database of 912 elite hedge funds as of Q2 of 2024. Here is the list of 6 best geothermal stocks to invest in sorted in ascending order of their number of hedge funds as of Q2.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
6 Best Geothermal Stocks To Invest In
6. Eversource Energy (NYSE:ES)
Number of Hedge Fund Investors in Q2 2024: 26
Eversource Energy (NYSE:ES) is a major energy provider in the New England region, serving over 4 million customers through subsidiaries such as Connecticut Light and Power (CL&P), NSTAR Electric, Public Service Company of New Hampshire (PSNH), and Aquarion Company. Offering electric, gas, and water utility services, Eversource Energy (NYSE:ES) is dedicated to promoting green energy initiatives and is actively investing in wind and geothermal projects as part of its strategy to transition to more sustainable energy sources.
On June 4, Eversource Energy (NYSE:ES) launched a geothermal project in Framingham, Massachusetts. It’s the company’s first utility-scale geothermal network in the U.S. Over the next two years, the project will test whether this geothermal system is a cost-effective and efficient alternative to traditional heating fuels such as oil and natural gas.
The pilot project involves 31 residential and 5 commercial buildings, where participants will be connected to a one-mile loop that circulates fluid to provide heating and cooling. Eversource Energy (NYSE:ES) has partnered with the local government, community groups, and environmental organizations to make this project a reality. If successful, the company plans to expand the use of geothermal energy across New England, helping reduce carbon emissions and supporting the region’s clean energy goals. Eversource Energy (NYSE:ES) is also exploring the use of geothermal heat pump systems for residential and commercial applications.
Eversource Energy’s (NYSE:ES) stock is trading 14.91 times its earnings, which is an almost 15.27% discount compared to the sector median of 17.60. Analysts have a consensus Buy rating on the stock, with an average price target of $73.26 which indicates a potential 7.49% upside from current levels. As of the second quarter, Eversource Energy’s (NYSE:ES) stock is held by 26 hedge funds, with a total stake valued at $622.20 million. Zimmer Partners is the largest shareholder in the company and owns shares worth $924.57 million as of June 30.
5. Baker Hughes (NASDAQ:BKR)
Number of Hedge Fund Investors in Q2 2024: 41
Baker Hughes (NASDAQ:BKR) is a global leader in oilfield services and equipment and serves clients in over 120 countries. The company has been expanding its focus on renewable energy technologies, particularly in geothermal energy using its advanced geothermal drilling solutions.
Baker Hughes (NASDAQ:BKR) possesses Advanced Geothermal Systems (AGS), which use closed-loop technology to enhance energy extraction from wells, through its investment in GreenFire Energy. This enables repurposing its oil and gas infrastructure for geothermal energy by producing energy from abandoned oil and gas wells by retrofitting existing wells. Using these wells, Baker Hughes (NASDAQ:BKR) can harness geothermal energy for both power generation and direct-use applications, which will help revitalize depleted fields and make previously uneconomical projects viable. In March, Baker Hughes (NASDAQ:BKR) also announced a collaboration with Earths Energy (ASX:EE1) to explore, develop, and commercialize geothermal projects in Australia by leveraging its technology capabilities.
As the world continues to transition toward cleaner energy sources, Baker Hughes’ (NASDAQ:BKR) advanced technology, global reach, and deep industry expertise give it a distinct competitive advantage in the growing geothermal market. Analysts expect the company to increase its earnings by almost 32% this year and have a consensus Buy rating on the stock, with an average price target of $43.14 which indicates a potential 25.45% upside from current levels. As of the second quarter, Baker Hughes’ (NASDAQ:BKR) stock is held by 41 hedge funds, with a total stake valued at $1.16 billion. AQR Capital Management is the largest shareholder in the company and owns shares worth $223.52 million as of June 30.
4. Halliburton (NYSE:HAL)
Number of Hedge Fund Investors in Q2 2024: 41
Halliburton (NYSE:HAL) provides oil and gas equipment services and specializes in production enhancement and drilling solutions. The company provides services to major petroleum companies like Gazprom, Rosneft, Exxon Mobil, Shell, and TotalEnergies. Halliburton (NYSE:HAL) also provides fully integrated solutions by offering products, technology, and services for geothermal projects. The company supports all types of geothermal systems by providing solutions for underground analysis, building wells, completing them, and managing energy production.
On May 2, Halliburton (NYSE:HAL) introduced its GeoESP lifting pumps, a new submersible pump technology designed for geothermal energy applications to address fluid transport challenges by minimizing power consumption, resisting corrosion, and operating at extreme temperatures. The technology enhances geothermal operations with a focus on efficiency, safety, and durability. Additionally, Halliburton provides specialized liner hanger systems designed for geothermal wells, capable of withstanding high temperatures up to 650°F (343°C). These systems are tailored to meet different well construction needs, offering expandable liner hangers with 360° metal seals for complex operations, mechanical liner hangers for cementing support, and drop-off systems for simpler well-bottom cementing. Each solution is engineered to enhance well stability, streamline operations, and reduce costs, making them ideal for efficiently developing geothermal resources.
Halliburton’s (NYSE:HAL) stock is trading 8.78 times its earnings, which is an almost 21.74% discount compared to the sector median of 11.22. Analysts have a consensus Buy rating on the stock, with an average price target of $44.01 which indicates a potential almost 45% upside from current levels. As of the second quarter, the company’s stock is held by 41 hedge funds, with a total stake valued at $507.70 million. Point72 Asset Management is the largest shareholder in the company and owns shares worth $103.36 million as of June 30.
3. Weatherford (NASDAQ:WFRD)
Number of Hedge Fund Investors in Q2 2024: 43
Weatherford (NASDAQ:WFRD) is a major player in the oilfield services industry and focuses on providing equipment and services for drilling, evaluation, completion, production, and intervention in oil and natural gas wells. The company operates in approximately 75 countries and has around 18,500 employees worldwide. Weatherford (NASDAQ:WFRD) also provides comprehensive geothermal energy solutions, offers heat-resistant technologies for both new and existing wells, and optimizes operations with real-time data, digitalization, and automation.
Weatherford (NASDAQ:WFRD) has achieved notable success in the geothermal energy sector through its advanced technologies. One of the standout technologies is its competitive liner systems. These systems are engineered to perform in some of the harshest environments, including ultradeep, high-angle, and extended-reach wellbores. Weatherford’s (NASDAQ:WFRD) Drilling-with-Liner (DwL) approach combines drilling and casing simultaneously in a single operation, which is highly advantageous in geothermal drilling as it reduces drilling time and significantly lowers overall costs. The technology also enhances wellbore stability by immediately reinforcing the well with the liner, which is especially crucial in geothermal environments where high temperatures and pressures present significant challenges.
Analysts expect Weatherford (NASDAQ:WFRD) to increase its earnings by 24% this year and have a consensus Buy rating on the stock, with an average price target of $152.25 which indicates a potential almost 50% upside from current levels. As of the second quarter, the company’s stock is held by 43 hedge funds, with a total stake valued at $705.67 million. Renaissance Technologies is the largest shareholder in the company and owns shares worth $80.56 million as of June 30.
2. Schlumberger (NYSE:SLB)
Number of Hedge Fund Investors in Q2 2024: 67
Schlumberger (NYSE:SLB) is an oilfield services company that provides solutions for the exploration and development of oil and gas resources in over 85 countries. Schlumberger (NYSE:SLB) is heavily involved in geothermal energy through its GeothermEx division. Schlumberger (NYSE:SLB) is involved in approximately 80% of the world’s geothermal power projects, by offering a comprehensive range of services, from geothermal power generation to geothermal heating and cooling for buildings. The company’s GeothermEx consulting services cover every aspect of geothermal operations and utilize advanced technologies in well construction, digital solutions, and field development to ensure sustainable energy production.
On June 24, Schlumberger (NYSE:SLB) entered a strategic collaboration with Ormat Technologies (NYSE:ORA), a leading manufacturer and operator in the geothermal sector, aimed at advancing geothermal energy projects. The partnership brings together Schlumberger’s (NYSE:SLB) expertise in reservoir characterization, well construction, completions, and production technologies with Ormat Technologies (NYSE:ORA) specialization in geothermal project development, power plant design, and operation. The goal is to deliver integrated geothermal solutions that reduce project risk, improve economics, and ensure long-term reliability. The collaboration will cover both traditional geothermal solutions and emerging technologies such as enhanced geothermal systems (EGS) and advanced geothermal solutions (AGS).
Analysts expect Schlumberger (NYSE:SLB) to increase its earnings by almost 15.76% this year and have a consensus Buy rating on the stock, with an average price target of $65.05 which indicates a potential 47% upside from current levels. As of the second quarter, Schlumberger’s (NYSE:SLB) stock is held by 67 hedge funds, with a total stake valued at $1.50 billion. First Eagle Investment Management is the largest shareholder in the company and owns shares worth $1.26 billion as of June 30.
1. Berkshire Hathaway (NYSE:BRK-B)
Number of Hedge Fund Investors in Q2 2024: 120
Berkshire Hathaway (NYSE:BRK-B) is a multinational conglomerate holding company led by Warren Buffett. The company owns and invests in a wide array of industries, including insurance, utilities, railroads, and manufacturing. BHE Renewables, a subsidiary of Berkshire Hathaway Energy owns solar, wind, geothermal, and hydroelectric projects that produce electricity for the wholesale market and customers under long-term agreements.
BHE Renewables produces geothermal energy and operates 10 facilities in California’s Imperial Valley which produces 345 megawatts of electricity. The company’s geothermal brines contain relatively high concentrations of lithium which presents a lucrative opportunity for revenue generation. By extracting lithium from these brines, the company can tap into the growing demand for battery-grade lithium, providing a significant additional revenue stream alongside its core operations.
On June 4, BHE Renewable announced a joint venture with Occidental (NYSE:OXY) to deploy its TerraLithium’s Direct Lithium Extraction (DLE) technology to extract and commercially produce high-purity lithium compounds from geothermal brines in California’s Imperial Valley. The successful extraction of lithium from these geothermal plants is projected to yield around 90,000 metric tons of lithium carbonate equivalents annually, enough to power approximately 11 million electric vehicle batteries each year. This production capability will provide a significant revenue opportunity and position the company as a key player in the growing lithium supply chain.
Analysts expect Berkshire Hathaway (NYSE:BRK-B) to increase its earnings by almost 15% this year and have a consensus Buy rating on the stock, with an average price target of $715,333 which indicates a potential 6.28% upside from current levels. As of the second quarter, Berkshire Hathaway (NYSE:BRK-B) stock is held by 120 hedge funds, with a total stake valued at $18.21 billion. Bill & Melinda Gates Foundation Trust is the largest shareholder in the company and owns shares worth $10.01 billion as of June 30.
While we acknowledge the potential of Berkshire Hathaway (NYSE:BRK-B) to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than BRK-B but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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