7 Most Undervalued Renewable Energy Stocks To Buy Now

4. American Electric Power (NASDAQ:AEP)  

Number of Hedge Fund Investors: 35  

Forward P/E Ratio as of October 6: 17.82  

As one of the largest electric utilities in the United States, American Electric Power (NASDAQ:AEP) operates an extensive network of power plants, transmission lines, and distribution infrastructure, serving over 5 million customers across 11 states.

American Electric Power’s (NASDAQ:AEP) North Central wind project is one of the largest single-site wind farms in North America and provides 1,484 megawatts of energy to serve customers in Arkansas, Louisiana, and Oklahoma. American Electric Power (NASDAQ:AEP) is poised to capitalize on this trend, with plans to expand its renewable energy business at an annual growth rate of 15-20%. American Electric Power (NASDAQ:AEP) plans to add up to 8,982 megawatts of wind energy and up to 7,470 megawatts of solar energy to its portfolio by 2033.

The company’s strategic focus on renewable energy investments has positioned it as a major player in the rapidly evolving energy landscape, particularly as electricity demand surges due to the growth of generative AI and data centers. According to the International Energy Agency (IEA), global electricity demand is expected to increase by 4% in 2025, driven in part by tech giants like Amazon, Microsoft, Google, and Meta, which are investing heavily in data center infrastructure. In fact, data centers are projected to account for nearly 30% of electricity growth, with estimated investments in generative AI-related data centers reaching $2 trillion over the next five years, as estimated by Blackstone.

American Electric Power (NASDAQ:AEP) is trading 17.82 times its forward year’s earnings. The company is expected to achieve 6.8% earnings growth this year. As of the second quarter, 35 hedge funds have invested a total of $1.57 billion in the company’s stocks.