3 Green Energy Stocks Could Be Multibaggers: July Issue

There are concerns that if Donald Trump wins the 2024 presidential election, he will repeal the Inflation Reduction Act (IRA), which would hurt green energy stocks.

However, it is unlikely that this will happen.

First, the IRA enjoys popularity in states across the political spectrum. Second, presidents such as Seashell (NYSE:SHEL) Wael Sawan recently spoke out in favor of the IRA, noting that “bipartisan infrastructure legislation and the inflation reduction bill seem to be working to attract a significant amount of capital from various states, whether they are Democratic or Democratic-leaning states,” Politico.com quotes him as saying.

Second, Morgan Stanley argued that complete repeal of the IRA is unlikely even in the event of a Republican victory. Instead, the firm sees “domestic manufacturing, nuclear power, and wind and solar tax credits enjoying bipartisan support, reducing the risk of repeal regardless of the composition of the administration, without changing the IRA or the pace of clean energy development.”

And third, unless there is a red wave in Congress, the IRA and related actions will be fine.

That said, I would buy recent weakness in green energy stocks that have fallen on recent concerns, including:

First Solar (FSLR)

Weakness in First Solar (NASDAQ:FSLR) is worth buying.

Already starting to swing higher after a gap from around $240 to $210. Last traded at $221.25, I would use this weakness as a buying opportunity. First, IRA repeal fears are a bit overblown.

First Solar is a potential beneficiary of the AI ​​data center boom. According to UBS analysts, First Solar is “uniquely positioned” to benefit from the surge in electricity demand from AI as Big Tech seeks clean energy to power data centers.

These two significant catalysts could easily help FSLR fill the bearish gaps. Around 18 analysts rate First Solar as a Moderate Buy with an average price target of $284.56. The highest price target at the moment is $356.

Technically, First Solar is once again oversold on the RSI, MACD, and Williams %R. The last time these indicators were this low, FSLR fell from a low of around $140 to a recent high of $306.77. I expect FSLR to initially fill a bearish gap at $239.23 with a potential retest of $306.

Cameco (CCJ)

Weakness in uranium stocks such as Kameko (NYSE:CKJ) is also a buying opportunity.

First, there are still serious supply and demand issues. For example, “around 90 nuclear power plants are planned, 61 are under construction, and decommissioned nuclear reactors are being brought back to life,” says Swiss Resource Capital.

On the other hand, supply is set to tighten, especially with the ban on Russian uranium that goes into effect on August 11. After all, a ban on Russian uranium imports would easily shake up the global market and could push prices above $100 until more supplies arrive.

Uranium stocks are also benefiting from increased mining taxes in Kazakhstan, the world’s largest producer of uranium. On Jan. 1, 2025, the tax will increase from 6% to 9%. By 2026, new taxes will be based on production volumes. That could discourage more production and increase concerns about future supply.

iShares Global Clean Energy ETF (ICLN)

We can also diversify our investments by investing in renewable energy stocks through a publicly traded fund such as iShares Global Clean Energy ETF (NASDAQ:ICLN).

With an expense ratio of 0.41%, the ICLN ETF offers exposure to companies that generate energy from solar, wind and other renewable sources. Some of its largest holdings include Enphase Energy (NASDAQ:ENPH), First Solar, Sunny Edge (NASDAQ:SEDG) and Vestas Windmill (OTCMKTS:VWDRY).

What’s cool about this ETF is that it offers broad exposure to 102 clean energy stocks at a low cost of $13.86. Plus, with the Federal Reserve on track to lower interest rates, decreasing fears of IRA repeal, and growing demand for AI data center power, this should have a positive impact on ICLN and its 102 stocks.

As of the date of publication, Ian Cooper did not have (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are the author’s own, subject to the InvestorPlace.com Publishing Guidelines.

On the date of publication of this article, the editor in charge did not hold (directly or indirectly) any interests in the securities referred to in this article.