Today is off to a good start for Wall Street, as many stocks have started the day in the green. Since this market momentum is primarily fueled by the passing of President Joe Biden’s bipartisan infrastructure bill, which includes provisions for clean energy and technology, green seems to be the color of the day. Many energy stocks are riding the wave, but one company has even more cause to celebrate this morning. Energy storage innovator Proterra (NASDAQ:PTRA) has received more good news closer to home. As a result, PTRA stock is reacting well.
PTRA Stock: What’s Happening
Just before markets closed last week, it was announced that Proterra had been selected by the Los Angeles Department of Transportation (LADOT) to install an EV (electric vehicle) charging microgrid at Washington Bus Yard. After receiving a $6 million grant from the California Energy Commission, LADOT is able to award the contract for the construction of one of the country’s largest EV fleet charging systems to Proterra and fellow energy supplier Apparent.
This great news for Proterra just happens to coincide with the passing of the infrastructure spending bill. This monumental package promises to invest millions in the energy sector, creating new opportunities for companies in the space. With these two catalysts, it’s no surprise that PTRA stock is surging today, up more than 15% in the first two hours of trading. These gains come on the heels of a difficult week that ended with shares falling by more than 6%. For the month, though, shares are up by more than 35% and aren’t likely to drop off again in the months to come.
Why It Matters
The city of Los Angeles was early to the sustainability race, taking steps to incorporate EVs into its public transportation in 2017. Installing such a large scale charging station powered by a solar and storage microgrid system is a significant step forward. Other cities will likely follow this example and adapt similar systems. This is true particularly as the production of EVs increases throughout the country.
The future of transportation is electric. Business leaders have known it for years, but the passing of a massive infrastructure bill that includes provisions for EV charging technology means that Capitol Hill also knows it. For companies that operate in the energy storage space, the market opportunity has never been larger. Infrastructure stocks have been surging all morning, and ChargePoint Holdings (NYSE:CHPT), a company that producers EV infrastructure such as charging stations, is having almost as good a morning as Proterra.
Our government wants to see more EVs on the road and that means more options for charging them. Energy storage innovators may not receive as much coverage as the companies producing EVs themselves, but that doesn’t mean they aren’t a worthwhile investment. As the market heats up, now could be the time for investors to take a look.
What It Means
Proterra is enjoying considerable market momentum today. While it will likely fade away, the future of PTRA stock looks quite promising. The successful construction of LA’s charging system will help Proterra establish itself as a player in the EV tech race. Therefore, Proterra will gain market share in an emerging space with plenty of growth potential.
If you’re considering a bullish play on EVs, don’t rule out the companies that are keeping them on the road. The future looks green for the entire sector, but the market tends to undervalue lesser known names like PTRA stock.
On the date of publication, Samuel O’Brient 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.