We recently published a list of 10 Best Wind Power and Solar Stocks To Invest In Now. In this article, we are going to take a look at where GE Vernova Inc. (NYSE:GEV) stands against other best wind power and stocks to invest in now.
According to a report by the World Economic Forum published on November 8, the US election result is expected to have a significant impact on the transition to renewable energy sources. Solar and wind energy stocks fell sharply following the election, as Donald Trump’s victory is anticipated to have a negative short-term impact on current climate policies. The president-elect has proposed policies that include increasing natural gas pipelines, ending offshore wind energy projects, and boosting fossil fuel production by easing restrictions on drilling on federal lands. He has also expressed intentions to withdraw the US from the Paris climate agreement and to support nuclear energy production.
Despite these challenges, analysts predict that the boom in renewable energy in the US is unlikely to be dramatically slowed. The Inflation Reduction Act passed during the outgoing administration, is expected to inject $1 trillion of spending into green energy, with estimates that 85% of the money has gone to districts that elected Republicans. This financial support, along with existing opposition to the curtailment of renewable energy, suggests that the long-term trajectory of the energy transition remains uncertain but potentially resilient.
READ ALSO: 10 Oil Stocks with Biggest Upside Potential According to Analysts and 7 Best Emerging Markets Stocks To Buy Now.
Trump’s Energy Policy and the Role of Elon Musk
In an interview with CNBC on November 13, Will Rhind, CEO of GraniteShares, discussed the potential implications of a Trump presidency on renewable energy such as wind and solar. Rhind noted that the playbook on energy policy was already seen in the previous Trump administration. The Trump administration has historically been more supportive of fossil fuels and less focused on renewable energy. Therefore, stocks and sectors favored by the Biden administration, such as solar and wind, might see a downturn.
Rhind suggested that the overall narrative may seem like it’s shifting back toward traditional energy sources. However, Elon Musk seems to be playing an integral role in the Trump administration, and he has been a proponent of climate policies, with his electric vehicle (EV) industry and other businesses, which suggests that energy transition policies may not be as impactful as some might expect today.
While the outcome of the US election and the anticipated policies of the new administration pose short-term challenges to renewable energy, the long-term outlook remains cautiously optimistic.
Our Methodology
To compile our list of the 10 best wind power and solar stocks to invest in now, we used clean energy ETFs plus online rankings to compile an initial list of 20 wind and solar energy stocks. We then used Insider Monkey’s Hedge Fund database to rank 10 stocks according to the largest number of hedge fund holders, as of Q3 2024. The list is sorted in ascending order of hedge fund sentiment.
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).
GE Vernova Inc. (NYSE:GEV)
Number of Hedge Fund Holders: 89
GE Vernova Inc. (NYSE:GEV) is a leading energy equipment manufacturing and services company that manufactures electrical equipment, natural gas turbines, hydropower turbines, and high-voltage electrical transmission products. The company’s products for renewable energy technologies include onshore and offshore wind turbines and solar power solutions. GE Vernova Inc.’s (NYSE:GEV) technology is utilized in roughly 55,000 wind turbines and 7,000 gas turbines spanning over 100 countries.
GE Vernova Inc. (NYSE:GEV) has announced a temporary halt on new offshore wind turbine projects due to unfavorable market conditions. The company plans to focus on executing its existing backlog of $3 billion which is expected to be completed within the next two years. While the offshore business faces challenges, the company is optimistic about the growth prospects of its onshore wind segment, which has seen significant increases in orders. To improve profitability, the company is implementing cost-saving measures and remixing its backlog. Management expects the onshore wind business to deliver high single-digit EBITDA margins on flat revenue this year, with potential for margin accretion as revenue grows as early as 2026.
GE Vernova Inc. (NYSE:GEV) is seeing significant growth in demand for grid-related investments to improve reliability and connect more zero-carbon power sources. The company’s Electrification segment is benefiting from this trend, with revenue growth of 24% in Q3. The company is also investing in its capacity to support the growing demand for electrification products, including high-voltage direct current (HVDC) systems, transformers, and switchgears, which are essential for connecting new generation sources to the grid. GE Vernova Inc. (NYSE:GEV) is also investing in its power conversion capabilities, which are critical for the integration of solar and wind energy into the grid.
In their Q3 investor letter Carillon Tower Advisers, an investment management company, said the following regarding GE Vernova Inc. (NYSE:GEV):
“GE Vernova Inc. (NYSE:GEV) is a global leader in the electric power industry that was recently spun out of a much larger industrial conglomerate. The company’s shares have performed well since, primarily as a result of power demand growth forecasts that continue to rise. We believe GE Vernova is distinctly positioned to capitalize on this attractive trend across its various products and services, but most notably within its large-scale gas turbine equipment and related services, as well as in its high-voltage electrical transmission products. The company is seeing a notable uptick in demand and is booking orders at profitability levels in excess of prior investor expectations.”
Overall, GEV ranks 1st on our list of best wind power and stocks to invest in now. While we acknowledge the potential of GEV to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than GEV but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
