With Joe Biden heading to the White House, green energy stocks could see higher highs. They could even be some of the top stocks for 2021.
For one, under Biden the U.S. is likely to rejoin the Paris Climate Accord. Two, Biden reportedly has a $2 trillion clean energy plan.
Three, the latest $900 billion stimulus bill, which includes a $600 payment to individuals, has $35.2 billion for new energy initiatives. For example, it authorizes tax credit extensions and new research and development programs for solar, wind and energy storage, funding for energy efficiency projects, and upgrades to the electric grid.
That being said, some of the biggest winners could be those associated with a greener future. Look for these to be some of the top stocks for 2021.
- SunPower (NASDAQ:SPWR)
- Global X Autonomous & Electric Vehicles ETF (NASDAQ:DRIV)
- Albemarle Corp. (NYSE:ALB)
- Plug Power (NASDAQ:PLUG)
- Nio Inc. (NYSE:NIO)
Top Stocks for 2021: SunPower (SPWR)
The last time I weighed in on SunPower, I said, “I wouldn’t be shocked to see SPWR at $40, near term.” That was on Nov. 9 as the SPWR stock traded at $20.
Today, it’s up to nearly $30 and could still head to $40. With Biden in the White House, solar stocks could grab bigger attention.
Helping quite a bit, as part of the latest stimulus package, a two-year solar tax credit extension was a “much better outcome than the industry had expected,” according to Wood Mackenzie head of solar research, Ravi Manghani, as noted by Seeking Alpha. He added the credit would provide big upside to solar growth through 2025.
Global X Autonomous & Electric Vehicles ETF (DRIV)
One of the best ways to diversify your portfolio is with an exchange traded fund such as DRIV. Not only does this ETF give investors exposure to EV and autonomous stocks, such as Tesla (NASDAQ:TSLA), Nio, Qualcomm (NASDAQ:QCOM), NVIDIA (NASDAQ:NVDA), Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), Advanced Micro Devices (NASDAQ:AMD), and Toyota Motor (NYSE:TM), it does so at less cost of $23 a share.
Since the start of 2020, DRIV accelerated from a March low of $9.66 to $23.60. With EV momentum only growing, I’d like to see the DRIV ETF closer to $40 by the close of 2021.
Albemarle Corp. (ALB)
One of the first times I weighed in on the ALB stock, I said it could hit $100 a share on lithium demand. That was on July 21, as ALB traded at a low of $86.45. Today, it’s up to almost $150 and could see $200 a share in the near term on lithium demand.
Analysts believe electric vehicles could account for up to a third of auto sales in the next five years, according to the Boston Consulting Group. However, for that to happen, the world needs as much lithium as it can get its hands on.
In fact according to analysts at Roskill, “The underlying demand growth for lithium compounds remains strong, with demand from rechargeable battery applications forecast to exceed 220kt LCE in 2020, representing roughly 70% of total lithium demand.”
Plug Power (PLUG)
When I last highlighted opportunity in PLUG, it traded at $14.65 on Oct. 30. Today, it’s up to $35.58 and could easily see $40 in the near term on the green energy boom.
According to the company, Plug Power customer demand for hydrogen has grown about 10x over in the last five years, which is about a 200% annual growth rate. With estimates saying hydrogen could supply up to 18% of global energy by 2050, Plug Power could be in great position to grow.
Helping, Morgan Stanley analyst Stephen Byrdjust raised his price target on the stock to $38 a share with a buy rating. He sees even more growth ahead, saying that a $3 trillion market size is possible with the expansion of hydrogen usage. In addition, the analyst believes Plug Power’s history with hydrogen-fuel cell powered forklifts gives it a unique advantage, too.
In early 2020, NIO looked like it wouldn’t survive the year. The company said there was “substantial doubt” in its ability to continue as a going concern. However, after turning things around, posting exceptional delivery numbers, and earnings, the stock soared from a low of $2.15 to a recent high of $47.30.
With NIO, I expect to see further upside once its next delivery numbers are released. In the near term, I’d like to see NIO closer to $60 a share.
In addition, JP Morgan analyst Nick Lai recently upgraded the NIO stock to a buy from a hold, with a target price of $40 a share. He believes China’s EV penetration could quadruple by 2025, “meaning that about 20% of all new cars sold in China would be battery powered,” as noted by Barron’s.
On the date of publication, Ian Cooper did not have (either directly or indirectly) any positions in the securities mentioned in this article. Ian Cooper, an InvestorPlace.com contributor, has been analyzing stocks and options for web-based advisories since 1999.