Hello, Reader.

If artificial intelligence was a member of the Animal Kingdom, it would probably be a sea otter.

Like the adorable, furry marine mammal, AI has a voracious appetite.

A sea otter consumes about one-quarter its body weight in food every day, just to maintain enough warmth to survive in frigid waters. AI’s appetite for electrical power is almost as prodigious; it devours kilowatts of electricity like an otter feasts on sea urchins and abalone.

So, this growing source of electricity demand provides the newest reason to consider investing in a previously beaten-down sector: renewable energy.

Let’s take a look…

Growing Demand for Energy

Every facet of the digital economy relies on electricity for its lifeblood, from the Internet to cryptocurrencies to EVs to smartphones to data centers.

Data centers, by themselves, consume about 1.5% of the world’s electricity, which is about what the entire country of Indonesia uses! But the annual consumption number surges to more than 7% (according to researchers from Sweden) after including electricity demand from…

• Wired and wireless networks…
• Production and/or delivery of internet-based information and communication…
• And connected devices, like smartphones, laptops, and the Internet of Things.

Furthermore, a different group of researchers predicts that total electricity demand from these digital activities could soar to 21% of world electricity demand by 2030 – or more than what the United States currently consumes.

These guesses about future electricity demand from the digital economy are just that: guesses. But the trend is unmistakable; demand is on the rise. And the age of AI has only supercharged this trend.

Renewable Energy Stocks Recovery

The rapidly growing demand for electricity from AI and other digital processes could be a big “So what?” from an investment standpoint. On the other hand, this new source of demand does strengthen the bullish argument for renewable energy stocks.

Even before the digital economy became a major electricity consumer, the structure of global power production had been pivoting away from legacy technologies like coal. Renewables have been filling the void and will continue to do so. Last year, for the first time ever, wind and solar generated more electricity in the U.S. than coal.

This transition toward renewables has not hit the “pause” button, even though most renewable energy stocks have. Last year, according to Bloomberg New Energy Finance (BNEF), global investment in clean energy infrastructure and technology jumped 17% to a record $1.8 trillion.

Unfortunately, the stock market has not received this message. The renewable energy boom has taken a back seat to sexier stories like the AI boom. Almost every stock with a connection to the renewable energy industry has been tanking for months.

Their collective collapse from the peaks of late 2021 has been truly breathtaking. As the chart below shows, most major ETFs in the renewable energy sector have plummeted more than 50% during the last three years, despite the fact the S&P 500 Index has been hitting all-time highs.

Partly, this massive selloff results from the fact that many renewable energy companies have struggled to convert rising sales into rising profits… or any profits at all.

But as business continues to boom in the renewable energy industry, select stocks in the sector will begin to recover and move to the upside once again.

Over the next few years, record-setting investment dollars will continue pouring into mainstream renewables like wind and solar, but energy storage will likely capture a growing percentage of those dollars. Last year, for example, global investment in the energy storage portion of the clean energy industry soared 76%, according to BNEF.

This investment surge is easy to understand. Energy storage can significantly boost the efficiency and economics of wind and solar installations.

To review: Energy storage refers to any type of battery that stores the electricity renewable energy installations produce.

“Long-duration” storage technologies, like hydrogen fuel cells, will likely gain market share.

This revolutionary type of fuel is cheaper than natural gas and cleaner than oil. In fact, 225 coal and almost 1,000 natural gas plants in the U.S. could soon run on hydrogen fuel, making this a great market opportunity. 

Everyday Americans can position themselves today for the opportunity to pocket massive gains in the wake of this shift. 

So, click here to learn how this fuel is changing the energy sector – and how you could profit.

Regards,

Eric Fry