Why the ‘everyone’s a winner’ energy trade can’t last forever

Subscribe to enjoy similar stories. Almost every corner of the power sector has rallied this year. Can that winning streak continue? The list of power-sector winners is long.

It ranges from the greenest to the dirtiest, from established technologies to speculative ones, and even includes companies that play tangential roles in the sector. The underlying theme is scarcity: In a sector used to moving slowly to match flat demand, supply isn’t able to keep up with the growing and urgent power needs of artificial intelligence. In the earlier days of the AI rally, investors piled into the stocks of nuclear and natural-gas power plant owners such as Constellation Energy and Vistra.

Since then, the rally has spread to almost every corner of the electricity universe. Take renewable-energy stocks, which started the year weak as the sector’s subsidies landed on the chopping block as part of the One Big Beautiful Bill Act. Once the extent of cuts to renewable tax credits and the rules around qualifying for them became clear this summer, the sector started recovering.

Then there was a “catch-up trade" from investors focused on AI’s growing power demands, according to Mark Strouse, equity analyst at JPMorgan. The Invesco WilderHill Clean Energy ETF and the Invesco Solar ETF are up around 60% and 50% year to date, respectively. It isn’t just solar and wind.

The geothermal-energy company Ormat Technologies is up around 65% this year. The company has said it is in talks with data-center customers to sign power-purchase agreements at some of its existing geothermal facilities at higher prices once contracts expire. A range of nuclear-energy stocks have gained, too, buoyed in part by the Trump administration’s executive orders aimed at