3 Energy Stocks to Buy Now: June 2024

Stocks to buy

Some of the best energy stocks to buy now are associated with artificial intelligence.

For one, there are projections that data center power demand will double by 2030, thanks to artificial intelligence. Two, Goldman Sachs is bullish, estimating about 47 gigawatts (GW) of additional power generation capacity will be needed to accommodate growth. Three, electric utility companies, like Sempra (NYSE:SRE) expect to see a substantial amount of new power demand from data centers.

“In terms of macro numbers, by 2030 AI could account for 3% to 4% of global power demand. Google said right now AI is representing 10% to 15% of their power use or 2.3 TWh annually,” says S&P Global.

In addition, electric companies, like PG&E Corporation (NYSE:PCG) expect a tidal wave of new power demand from data centers powering technology like generative artificial intelligence. 

That being said, here are just a few hot energy stocks to buy now. 

NextEra Energy (NEE)

Source: T. Schneider / Shutterstock.com

NextEra Energy (NYSE:NEE) is one of the largest wholesale generators of electric power in the U.S.

For one, while NEE pulled back on guidance that came in lower than expected, weakness is a buying opportunity. Goldman Sachs said the same:

“We believe the pullback on the day, with NEE shares down 5.5%, represents a buying opportunity, and we attribute the weakness to positioning following strong performance over the last three months and a resetting of expectations on near-term growth opportunities,” said the firm, as quoted by CNBC.

Third, the U.S. is forecast to build 375 GW to 450 GW of new renewable energy projects between now and 2030. That’s almost double the capacity of the last 30 years. All of which should help fuel even more upside for dividend-paying NextEra Energy.

Plus, its recent joint development agreement with Entergy (NYSE:ETR) will allow it to accelerate the development of about 4.5 gigawatts (GW) of new solar generation and storage projects over the next five years. That’s significant for the company.

Kinder Morgan (KMI)

Source: JHVEPhoto / Shutterstock.com

Another one of the top energy stocks to buy now is Kinder Morgan (NYSE:KMI). 

It’s also another one of the top energy beneficiaries of the artificial intelligence story. For one, skyrocketing electricity loads will need another energy source if renewables cannot generate enough power, says CNBC. That other energy source is natural gas. And it could provide about 60% of the power demand growth from AI and data centers, they added.

“As much as 8.5 billion cubic feet per day of natural gas could be required additionally to match the rise in demand,” says Tudor Pickering, as noted by Reuters.

Even better, while we wait for further upside in the Kinder Morgan stock, we can always sit back and collect its current yield of 5.85%. Helping, analysts at Wells Fargo just upgraded KMI to an overweight rating with a price target of $22. 

Bloom Energy (BE)

Source: Sundry Photography / Shutterstock

Even Bloom Energy (NYSE:BE) may be a strong beneficiary of the AI boom.  

For one, Bloom Energy can provide fuel cells that run on natural gas or hydrogen. Two, the company just signed a contract with Intel (NASDAQ:INTC) to install fuel cell-based services at Intel’s computing data center in Santa Clara, California. 

That should draw even more attention for Bloom with its focus on the data center market, which is quickly growing.

Bloom Energy was even featured as a top pick in Barron’s as a stock poised to benefit from energy demand from AI data centers.

Helping, RBC Capital analysts reiterated a buy rating on Bloom Energy with a $15 price target. Analysts at BTIG also have a buy rating on Bloom Energy with a price target of $21. Even hedge funds, like Jim Simons’ Renaissance Technologies, just bought 111,500 shares of Bloom at the end of March. Squarepoint also just bought 468,730 shares of Bloom in March.

On the date of publication, Ian Cooper did not hold (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Ian Cooper, a contributor to InvestorPlace.com, has been analyzing stocks and options for web-based advisories since 1999.

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