With U.S. elections just days away, clean energy stocks have been pushing higher, notably SolarEdge Technologies (SEDG), a longtime favorite here at Investors Alley.
Over the last few weeks, shares of SEDG ran from $180 to a current high of $282.88 on the idea Joe Biden could win the election.
In addition, he has reportedly outlined a $2 trillion sustainable energy infrastructure plan that could make the U.S. carbon free by 2035.
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“With increasing investor expectations of not just a potential Biden win but further upside for renewables tied to a Dem sweep at the Senate, we note broader expectations for the solar industry to benefit broadly,” Bank of America strategist Stephen Suttmeier said, as quoted by CNBC. “On a relative price basis we have seen a very bullish rotation for clean energy relative to utilities on an upside breakout from a 9-year big base vs utilities.”
At the same time, the plan could end the use of natural gas over the next 15 years.
Biden’s energy plan could speed up natural gas becoming “economically and environmentally untenable within the power sector,” Bloomberg notes. “Biden’s climate plan would only accelerate that outcome, with massive investments in wind, solar and battery storage giving those energy sources a leg up. And his goal of a carbon-neutral grid would severely curb, if not destroy, gas’s share of the pie in favor of cheaper, cleaner renewables.”
At the moment, green energy stocks are attractive on the anticipation of a Biden win.
But with this election, there’s no clear winners at this point. These stocks are running higher solely on anticipatory momentum.
All could also see a sell the news reaction once the elections are over.
At time of this writing, Ian Cooper does not hold a position in any of the stocks mentioned.