Power Up: 3 Stocks to Ride the Massive Wave of Electricity Demand


  • With electricity consumption expected to surge tremendously in some parts of America, here are three stocks to buy. 
  • Eaton Corporation (ETN): ETN, which makes electrical equipment, expects its earnings per share to surge 11% this year. 
  • Powell Industries (POWL): Institutional investors are upbeat on POWL, which also makes electrical equipment. 
  • First Solar (FSLR): The demand for solar is expected to surge as electricity consumption jumps. 
Stocks to Benefit from Electricity Demand - Power Up: 3 Stocks to Ride the Massive Wave of Electricity Demand

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Due to the combination of the proliferation of AI and EVs, electricity demand is set to surge in America. This has investors searching for stocks to benefit from the increase in electricity demand. However, not all industry experts are upbeat. Tesla (NASDAQ:TSLA) CEO Elon Musk recently said, “Next year, you will see that they just can’t find enough electricity.” Musk is no longer one of the only voices warning about the need for much greater power generation.

Virginia power provider Dominion (NYSE:D) expects the demand to jump by 85% over the next 15 years. Meanwhile, Georgia Power reported that it will require the amount of power generated by four new nuclear plants by 2030. For investors who want to profit from the upcoming, tremendous growth in electricity demand here are three stocks to buy to benefit from electricity demand.

Eaton Corporation (ETN)

An Eaton (ETN) sign on a company building.
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Eaton Corporation (NYSE:ETN) specializes in providing equipment to electric power producers.

Last quarter, the revenue of the firm jumped 11% versus the same period a year earlier to $6 billion. Meanwhile its operating cash flow advanced 9% year-over-year to an impressive $1.3 billion. Also noteworthy is that in 2024 ETN expects its EPS to increase about 11% compared with 2023.

The company’s strong growth is being primarily powered by its electrical business as the unit’s backlog increased a very impressive 15% last year.

The shares have an attractive enterprise value to EBITDA ratio of 27 times.

Powell Industries (POWL)

A concept image of electricity flowing between two disconnected electric cables.
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Like Eaton, Powell (NASDAQ:POWL) focuses on marketing equipment for electrical power producers. Among its top-selling products are integrated power control room substations and medium-voltage circuit breakers.

Increasing my confidence in POWL stock, the Public Employees Retirement System of Ohio acquired over 3,000 shares of POWL in Q3 2024. This brings its total holdings in the name as of the end of September to nearly 12,200 shares. Pension systems usually employ very well-informed, intelligent stock pickers.

And in Q4 2023, Powell’s top line soared an incredible 53% versus the same period a year earlier to $194 million, while its backlog nearly doubled last quarter compared to Q4 of the previous year.

First Solar (FSLR)

First Solar logo on smartphone in front of computer screen with graphs. FSLR stock
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Ananlysts expect utility companies in America to purchase an unprecedented number of solar panels. This move will allow them to supply the amount of electricity that will be needed going forward. Nextracker predicts that the amount of energy generated by solar in the U.S. will increase at a CAGR of 26% between now and 2028.

As a huge manufacturer of solar panels, First Solar (NASDAQ:FSLR) is in a position to benefit from this rising demand. Indeed, analysts on average expect FSLR’s EPS to jump to $13.54 this year from $7.74 in 2023. For 2025, the mean estimate calls for the firm’s EPS to jump to $21.30.

Given all of these points, FSLR is one of the best stocks to buy to benefit from electricity demand.

On the date of publication, Larry Ramer 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.

Larry Ramer has conducted research and written articles on U.S. stocks for 15 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been SMCI, INTC, and MGM. You can reach him on Stocktwits at @larryramer.

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