Clean Energy Stock Revolution Is Coming
It’s easy to forget about the success that Tesla Inc (NASDAQ:TSLA) has had over the past few years. Since I’ve been (bullishly) writing about Tesla stock (about three years), we’ve seen over 100% in terms of share-price growth. So far in 2020, TSLA stock has soared by about 23%.
But we forget the lessons of this company’s success at our own peril.
For those looking to make big bets on small stocks, $500.00-plus Tesla stock is no longer a viable option.
And it’s unlikely that TSLA stock will rise by 10 times in the near future. A startup green stock, however, may.
Chart courtesy of StockCharts.com
I’ve written in the past that electric vehicle stocks will be on the rise in the near future, that a number of electric vehicle initial public offerings (IPOs) were likely on the way.
What these companies aim to do is reproduce Tesla’s success: provide an exciting, innovative technology at the precise moment that it’s gaining notoriety, and parlay that into revenue growth.
It’s a very strong model that has been done countless times in other emergent industries. It will no doubt pay off in the near future with renewable energy stocks and other types of green investing.
For an example of just how successful this model of investment can be, take a look at Al Gore. That’s right, former vice president (and almost-president) Al Gore.
Gore, of course, is famous for his activism in the early 2000s regarding climate change.
Nowadays, Gore works at Generation Investment Management LLP, an investment firm that’s primarily interested in sustainable investing. And that has paid off in a big way. (Source: “The Planet-Saving, Capitalism-Subverting, Surprisingly Lucrative Investment Secrets of Al Gore,” The Atlantic, last accessed January 20, 2020.)
I first read about Gore’s green investing success back in 2015, which is to say that the sustainable investing market is, well, itself sustainable.
Clean energy stocks have proven to be strong earners for years now, whether it’s Tesla and electric vehicles or other types of ventures, green investing is proving to be quite profitable.
I believe the sector will continue to show growth in the coming years.
How Green Investing Can Lead to Profits
Climate change has brought the conversation about green tech once more to the fore. But beyond electric vehicle stocks, there’s a host of companies that could benefit from the growing interest in renewable energy and other green technologies.
According to the UN report “Global Trends in Renewable Energy Investment 2019,” investors around the world have put more than $2.6 trillion into biofuels and renewable energy since 2004. (Source: “Are Investments In Greentech Making A Comeback? Here’s What The Future Holds For The Sector.” Forbes, October 23, 2019.)
Another study, by Cambridge Associates LLC, says around $8.0 billion has been invested in renewable energy source development.
So that’s trillions of dollars being funneled into the green sector looking for the next big green tech startup.
A 2018 report by Bloomberg L.P. found that investments in clean energy totaled over $332.0 billion, down about eight percent from the previous year. But that pendulum may be swinging back toward green tech stocks.
Many more voters and consumers are clamoring to see renewables be made a priority.
Climate change has been one of the most discussed issues on the debate stages so far in the U.S. Democratic Party’s presidential primary. If the president sitting in the White House in 2021 believes in the immediate threat of climate change, we can expect to see a whole new injection of government capital into the industry.
And then there are the publicly traded companies that are looking to make inroads in this sector. Household names like Apple Inc. (NASDAQ:AAPL) and Walmart Inc (NYSE:WMT) have begun making moves to run on green energy.
It’s looking more and more like renewable energy stocks are the way of the future.
With clean energy stocks, growth can come from any number of directions: competitors, governments, large public companies, or activism-minded investors. Any of these groups can greatly boost the fortunes of green tech stocks in the near future, potentially sending share prices soaring.
The green tech industry is, I believe, going to become valued in the trillions of dollars. This is worldwide sector, after all, with a worldwide consumer base.
While Tesla and other green tech stocks are already proving that there are vast sums of money to be made in this sector, the companies of tomorrow could prove to be even more profitable, leading to massive stock gains.