Last year, when Donald Trump returned to the White House championing an aggressive "Drill, baby, drill" energy agenda, betting on clean energy stocks seemed like a futile endeavor. However, for Helen Jewell, BlackRock's Chief Investment Officer for International Fundamental Equities, this was a moment of foresight and precise judgment, further cementing her reputation as a contrarian investor.
Convincing clients to adopt this viewpoint was challenging. They harbored deep skepticism about the prospects of solar and wind power, and their doubts were not unfounded. In the United States, approved projects were stalled, renewable energy subsidies were cut, and federal funding flowed to fossil fuel projects. Globally, while other nations continued to invest, green energy had become a contentious topic. At that time, a global renewable energy index had fallen 65% from its 2021 peak. Jewell recalled in an interview, "The most common feedback from clients was, 'We are uneasy about policy and regulation; we've been burned before. Why would this time be any different?'"
But the turnaround arrived quicker than anticipated. As of Thursday's close, the S&P Global Clean Energy Index had surged 60% over the past year, significantly outperforming the S&P 500's 20% gain. This performance even surpassed the so-called "Magnificent Seven" U.S. tech stocks and was nearly double the gains seen by oil stocks, which rose as oil prices breached $100 per barrel amid tensions involving Iran.
In Jewell's view, the clean energy rally is far from over. The U.S.-led conflict in the Middle East serves as a stark reminder of the world's deep reliance on the region's oil and gas resources. "The strikes on Iran underscore the strategic importance of energy independence, grid resilience, and secure domestic power supply," Jewell noted. "Given the urgent need for countries to rapidly and securely expand their national electricity grids, clean energy companies are poised to benefit continuously."
Looking back, the logic behind Jewell's initial call was clear: the massive computational power demanded by artificial intelligence (AI) would benefit all forms of energy production. She believes that utility companies, power generation equipment manufacturers, and solar panel producers will all gain. Her core thesis is that nations worldwide will pour vast sums into grid upgrades and energy transition infrastructure to support AI development. "We were very clear that for AI to succeed, it would require an enormous amount of energy. The story is no longer about 'replacing traditional energy' but about 'working alongside it,'" Jewell explained. "When we broke this logic down into production, efficiency, and transmission, people began to realize that Europe actually holds advantages in these areas."
Approximately one month after her bullish call, the global clean energy index, after four years of decline, bottomed out and began to recover. Since then, the share price of Germany's Siemens Energy has tripled, while Denmark's Vestas Wind Systems and the UK's National Grid PLC have seen their stock prices rise by 80% and 35%, respectively.
Contrarian Decisions: A Pattern of Accurate Predictions The success in clean energy is not Jewell's first contrarian move. Four years ago, when European banks languished under prolonged negative interest rates, her team was among the few steadfastly bullish investors. Since late 2021, as interest rates rose, the Stoxx 600 Banks Index has doubled, becoming Europe's best-performing sector last year. "I remember some clients' reactions were, 'European banks? Are you sure?'" Jewell recalled. "That skepticism was identical to their later attitude towards clean energy."
Currently, market doubts about AI are emerging again. Investors are selling stocks perceived as vulnerable to AI disruption, impacting sectors from software and wealth management to logistics. Even U.S. tech giants, after three years of gains, experienced a pullback in February. However, Jewell stated this does not affect her positive outlook on clean energy and continues to favor companies like Siemens Energy, cable manufacturer Prysmian, and power provider SSE. "Unless you believe AI will disappear tomorrow, investment in data centers will not stop," she emphasized. "Regardless of AI's trajectory, as long as it exists, it will require electricity."
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