After zooming on “blue wave” election results, clean energy stocks have cooled in recent months. This makes sense, given that Congress is still kicking the tires of President Joe Biden’s ambitious multi-trillion dollar green energy plan. The White House may still be working on its game plan to go green.
But a recent deal involving Bill Gates and Warren Buffett highlights how the business community is charging ahead with clean energy. Gates’ Terrapower is partnering with PaciCorp, which is owned by Buffett’s Berkshire Hathaway (NYSE:BRK-A, NYSE:BRK-B), to build an advanced nuclear reactor on the site of an old coal plant in Wyoming.
The clean energy sector does include nuclear power, but is largely focused on solar, wind and other less-controversial sources. Uranium-based energy has gotten negative publicity, but has significantly improved in quality over the years. Advanced nuclear reactors are safer than traditional reactors and could help the world make the full shift away from fossil fuels.
Sure, this project is only in its infancy. A subsequent boom in nuclear power may take years to play out, and the government may be slow to implement policy changes. Yet the private sector isn’t slowing down with its green pivot. And if nuclear power is part of the equation, the uranium sector may go along for the ride with conventional clean energy sources.
So with the business community charging ahead toward a carbon-free future, which companies could benefit? These seven clean energy stocks have already gotten investors’ attention and could be just starting to heat up:
- Bloom Energy (NYSE:BE)
- Cameco Corporation (NYSE:CCJ)
- SunHydrogen Inc. (OTCMKTS:HYSR)
- Ocean Power Technologies (NASDAQ:OPTT)
- SunRun (NASDAQ:RUN)
- Uranium Energy (NYSE:UEC)
- Energy Fuels (NYSE:UUUU)
Clean Energy Stocks: Bloom Energy (BE)
At first glance, oxide fuel cell company Bloom Energy has little to do with the Buffett/Gates deal. But when you dive into the details, there may be a nuclear connection with BE stock. Recently, the company signed a deal with Idaho National Laboratory to run experiments using nuclear energy to generate clean hydrogen.
This possible catalyst for a BE stock bump is still in its early stages. For now, it may not have a big impact on the near-term price action of Bloom Energy shares.
In the near term, Bloom Energy could be helped by more indicators that hydrogen will play a role in a post-fossil fuel world. Unfortunately, the president’s still-pending bill favors the battery-run electric vehicle (EV) space more than the hydrogen fuel cell industry. Yet projections still call for this industry to grow at a healthy clip through 2027. This may be enough to send shares up from their current price of $24 and toward previous highs.
Sure, there are many hydrogen fuel cell plays out there. Besides BE stock, there’s FuelCell Energy (NASDAQ:FCEL) and Plug Power (NASDAQ:PLUG). But Bloom Energy has the shortest timeline to profitability. It’s an overall risky sector. But their profit timeline and clean-hydrogen experiment means BE stock may be the best way to play this clean energy trend.
Cameco Corporation (CCJ)
The Gates/Buffett deal may be making headlines, but there’s already been a wave in nuclear power usage outside the United States. China, India, Egypt and Turkey have been investing in new nuclear reactors, which has already driven more interest in uranium plays like CCJ stock.
Up more than 90% in the past year, you may think you missed the chance to ride the CCJ stock rebound. But if the TerraPower/PacifiCorp deal is just the start of a nuclear power wave in the U.S., Cameco shares may have more room to rally.
Right now, nuclear power generates 20% of America’s electricity. This has been consistent for the past 30 years, even as many power plants have been decommissioned. But if the Buffett/Gates project is a success, it could signal that nuclear energy is making a comeback as a major electricity source.
This, in turn, could result in a big increase in uranium prices. Maybe not to extreme prices, like the $140 per pound briefly seen in 2007. But the price of uranium would likely see a substantial boost from its current market level around $32 per pound.
It may take a while for uranium to experience another surge. But buying CCJ stock ahead of a possible nuclear power boom could be a wise move in hindsight.
Clean Energy Stocks: SunHydrogen Inc. (HYSR)
Last year’s hydrogen fuel cell stock bubble may have already popped. Even so, popular plays like Bloom Energy, FuelCell Energy and Plug Power are still up from their pre-boom price levels. But those looking to make a high-risk, but possibly high-return, wager on hydrogen power should consider under-the-radar names like SunHydrogen.
HYSR stock is a speculative small-cap play that trades on the over-the-counter (OTC) market. The company creates “green hydrogen” via water electrolysis. SunHydrogen’s technology could proliferate the use of hydrogen fuel to power vehicles. But before you put in a buy order, be aware that HYSR stock is definitely a “tread carefully” situation.
SunHydrogen recently announced progress with the development of its green hydrogen technologies, but it could still face major setbacks. If things pan out, this company could be worth many times what it trades for today. Shares are down from their hype-fueled highs set in January, when it traded for as much as 34 cents per share. But while comparatively “low-priced” at 8 cents per share, any hiccup could send HYSR stock back to prior lows between 1 and 2 cents per share.
Ocean Power Technologies (OPTT)
The Gates/Buffett news may show that nuclear power can make a comeback as a clean energy source. But it’s not the only one that can deliver an alternative to solar and wind energy. One source that could change the clean energy game comes from a development-stage company called Ocean Power Technologies.
Ocean Power generates electricity from ocean waves. It’s an interesting spin on hydroelectric power, but can they pull it off? More importantly, can they pull it off within a timeframe that rewards current OPTT stock investors?
That was a major concern for a Seeking Alpha commentator, who discussed the stock back in February when it was trading near its highs. Per the commentator, the company is making progress with its flagship PB3 PowerBuoy product. This includes recent contract wins across many sectors, including offshore energy exploration and production companies.
But Ocean Power has left the meter running without any signs of moving soon. If the company fails to show investors that it can generate revenue, OPTT stock will fall hard. Already down from its meme stock high of $7.30 per share, the stock found a price floor around $2.50. But shares could take another major dive if Ocean Power can’t turn its technology into a viable business.
Clean Energy Stocks: Sunrun (RUN)
Less popular alternative energy sources like hydroelectric, nuclear and hydrogen could outclass more popular sources like solar and wind. But that doesn’t mean solar energy won’t play a role in our carbon-free future. As solar panel usage grows, RUN stock may be a worthwhile play.
Sunrun is the clear leader in U.S. rooftop solar panel installation. The company could benefit the most as solar energy penetrates the market in the coming years. The flipside, though, is that investors have been aware of this company and its potential for quite some time. If you can recall, shares surged in the run-up to the 2020 U.S. general election.
After Biden’s victory, speculators who “bought the rumor” decided to “buy more on the news.” They chased clean energy stocks and sent share prices soaring. Yet prices peaked by the time of the presidential inauguration in January. When investors realized the Biden administration’s sweeping changes would take time, they bailed out. RUN stock has since fallen to about $50 per share, a drop of 50% from its high of $100.93 per share.
So if the solar investing trend has clearly run out of juice, why buy now? With shares holding steady at today’s prices, now may be time to invest. A rally could crop up if Congress passes the infrastructure bill with clean energy funds. Alternatively, with its moderate level of short interest, shares could rocket up again on a short-squeeze.
Uranium Energy (UEC)
Let’s get back to uranium plays, which stand to benefit the most from the Gates/Buffett nuclear news. Uranium Energy stock is another nuclear energy play up considerably over the past 12 months. Since last June, shares of UEC stock have skyrocketed from $1 per share to around $3.20 per share.
As with Cameco, if you didn’t get in early, by no means did you miss the boat. Uranium Energy is generating zero revenue, so it’s clear investors aren’t valuing it on current financials. As I wrote back in May, this stock price is based on the prospects of rising uranium prices. To some, that may signal that shares are built on hype rather than substance and could fall if expectations don’t play out.
While this is true, that doesn’t necessarily mean you should take a hard pass. The Terrapower/PacifiCorp deal shows that business leaders may “buy-in” on nuclear power despite its past safety controversies. Uranium could become an alternative energy source that helps the world move beyond fossil fuels.
Many of these factors have been already priced into UEC stock. Shares may hold steady as investors assess whether nuclear power and uranium prices are coming back in a big way. And if they do make a comeback, it may be enough to send this speculative mining play back up to prices not seen in decades.
Clean Energy Stocks: Energy Fuels (UUUU)
Similar to Uranium Energy, Energy Fuels is another small, high-risk stock in the nuclear energy space. And while UUUU stock has been pumped up substantially, it could have more room to grow thanks to the push to go green.
Energy Fuels’ stock could already rise from a nuclear power comeback. But in addition to being the largest U.S. producer of uranium, the company also extracts rare earth elements. This gives UUUU stock indirect exposure to another “green wave” trend: the rise of EVs.
Demand for rare earth metals is surging due to their use in EV batteries. This sideline is just another factor firmly in the corner of UUUU stock. With that in mind, it may make sense to buy the stock, even after it rallied more than three-fold since last December.
That being said, don’t consider this a “bet the ranch” play. The Biden administration did not include funding for a national uranium reserve in the budget. That may show that the White House is pulling back on its support of nuclear power as a clean energy alternative. If more negative developments come out that outweigh positives like the Gates/Buffett deal, uranium plays like this one could be at risk of a meltdown.
On the date of publication, Thomas Niel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Thomas Niel, a contributor for InvestorPlace.com, has been writing single-stock analysis for web-based publications since 2016.