By Laura Sanicola
For years, clean energy has been where investor optimism went to die. Today's power shortage is forcing a second look.
Popular clean-energy exchange-traded funds like iShares Global Clean Energy and Invesco WilderHill Clean Energy are up more than 30% this year. The funds are beating both the broader market and the oil major--heavy energy index represented by the State Street Energy Select Sector SPDR ETF -- even after the Iran war-driven oil-price spike handed fossil fuels every advantage.
Like a cat with nine lives, the capital-intensive renewables sector has survived challenges over the past 20 years that included its initial speculative boom, politically fraught subsidy fights, the shale revolution (which made fossil fuels more competitive), Chinese overcapacity in solar and battery technologies, and retaliatory U.S. tariffs.
For its current run, clean energy can thank Big Tech, which has created demand for fast-to-build power for the first time in decades -- solar, wind, and batteries often fit the bill. The Iran war also created demand for alternatives to fossil fuels.
"The strong performance of the clean energy sector is proof that if you electrify and use clean energy, you have more security than you do if you're more dependent on natural gas and oil," says Ben Bielawski, portfolio manager at Duff & Phelps Investment Management.
There are plenty of American names to stake bets on. But outside the U.S., investors can find a more favorable regulatory environment and cheaper investment options without the premium now attached to the U.S. artificial-intelligence power trade.
For example, investors searching for the European version of NextEra Energy -- a large clean-energy producer with a regulated utility arm -- need look no further than Iberdrola. The Spanish utility owns power grids in several major markets, including Spain, Britain, Brazil, and the U.S., and has spent decades building one of the world's largest renewable power fleets.
It is spending most of its capital not on generating more power but on its poles-and-wires business, which earns steadier returns as electricity demand rises. Iberdrola's U.S.-listed American depositary receipts are trading at a lower ratio of enterprise value-to-earnings before interest, taxes, depreciation, and amortization, or Ebitda, than shares of NextEra, meaning you can own the theme without paying the full AI premium attached to U.S. power stocks like NextEra. Bielawski of Duff & Phelps likes the stock.
For the European equivalent of Constellation Energy, a power producer that owns scarce clean nuclear and hydroelectric power, Bielawski points to Finnish utility Fortum. Nearly all of its power generation comes from renewable or nuclear sources, giving investors exposure to "always available" clean power without having to bet on a new technology. Fortum, which has a somewhat illiquid ADR under the symbol FOJCY, now boasts a dividend yield of nearly 4%, according to FactSet data.
That dividend should remain secure as long as Big Tech continues to target the region for new data centers. Meta Platforms built one of its largest data centers in the world in northern Sweden, and Alphabet's Google has repeatedly expanded its facility in Hamina, Finland. They aren't there for the scenery; clean hydropower is cheap in the Nordics, and cold air to cool the data centers is free.
Infrastructure Plays
Beyond the utilities, there are also foreign equivalents of U.S. superstar stocks making electrification physically possible.
Balfour Beatty, the United Kingdom construction contractor, is a rare operator sitting on $1.6 billion in net cash and is helping build energy infrastructure in Britain. That includes work tied to the country's first new nuclear station in a generation, as well as a BP-- and Equinor-backed project that aims to be among the world's first commercial-scale natural-gas plants with carbon capture.
Spie, a French company, is like the European version of Quanta Services in that it designs and installs electrical infrastructure. Germany was the company's fastest-growing market in 2025; the country no longer has access to cheap Russian gas after Russia severely restricted and then entirely halted deliveries following its invasion of Ukraine. Germany moved to end its dependence on Russian energy, a transition made permanent when the Nord Stream pipelines were damaged by sabotage in 2022.
Italian cable maker Prysmian is a rare clean-power company that can make high-voltage electrical cable at scale. It has spent years increasing its market share, and data center power has given the 150-year-old business a new lease on life. The company has grown its free cash flow to 1.19 billion euros ($1.4 billion) over the 12 months that ended March 31, up nearly 20% from the previous year despite relatively heavy spending on factories and equipment.
The most explosive growth has come from companies promising to power data centers in less than a year, such as fuel-cell company Bloom Energy. Bloom spent most of its 25 years as a promising -- but unprofitable -- solid oxide fuel-cell maker that never quite broke through. Then the AI data center boom found it. Data center developers can install Bloom's fuel cells on site, giving them access to power far faster than waiting years for new grid connections or power plants.
The electricity generated this way is costly, but companies racing to develop AI are willing to pay higher prices. Bloom has struck deals with Big Tech companies and utilities, helping the stock surge more than 1,500% over the past 12 months and pushing the company's market cap to about $85 billion.
Bloom's market cap is now within range of Constellation's, even though Bloom has only about 1.5 gigawatts deployed globally -- or just over 4 gigawatts including Oracle's announced order -- while Constellation owns about 55 gigawatts of generating capacity, responsible for roughly 5% of U.S. electricity. A comparison is either an argument for Bloom's potential or a warning about its price, depending on your disposition.
If you aren't tempted to buy Bloom at that valuation, Bielawski says there is a parallel play in Ceres Power, a U.K.-listed company that few the U.S. have heard of. It doesn't manufacture fuel cells like Bloom but instead licenses the intellectual property behind them. Rather than carrying the capital costs of building and deploying projects itself, it collects royalties from partners including Delta Electronics, one of Taiwan's largest manufacturers, and Doosan, the Korean industrial giant.
Ceres' technology uses steel rather than the ceramics most competitors rely on, which the company says can make it cheaper to produce, a meaningful edge in the price-sensitive Asian markets where the real volume opportunity lies. Ceres has a market cap of roughly $2 billion, a fraction of Bloom's.
Nuclear's Revival
There is still plenty of hand-wringing about how much new nuclear development the world can realistically expect, given the sector's history of cost overruns. Still, the political backdrop in Europe is shifting in nuclear's favor.
Belgium has spent the past two decades trying to wind down its nuclear industry, but Russia's invasion of Ukraine accelerated a rethink of that strategy. At the end of April, Brussels entered exclusive negotiations with French utility Engie for Belgium to acquire its nuclear reactors, including its workforces and liabilities inside the country. The deal would effectively nationalize an industry Belgium had spent years trying to phase out.
The Nordic region is moving in the same direction. Sweden has set a target of 10 gigawatts of new nuclear capacity by 2045, and in April proposed taking a 60% ownership stake in the country's first new reactor project since 1985. Norway, which has never had a nuclear plant, greenlit an impact assessment for a small modular reactor in March.
Meanwhile, Spain is having discussions about extending the life of its operating reactors.
The revival needs fuel. Russia is a major supplier of conventional enriched uranium, the fuel used by today's reactors, as well as the only commercial supplier of high-assay low-enriched uranium, or Haleu, which many advanced reactor designs are expected to need. In the U.S. public market, Centrus Energy is the clearest public-market bet on building a domestic alternative.
Centrus owns the only American-controlled enrichment plant licensed to produce Haleu but says it won't be producing it at commercial scale until at least the end of the decade.
The Department of Energy awarded nearly $1 billion to one of Centrus' subsidiaries in January to build out U.S. Haleu enrichment capacity. "The U.S. is short of enrichment, and we need to build up that capability regardless of reactor type," says Mark Corigliano, founder of Corigliano Investment Advisers, who likes the stock. Still, the scale of the buildout has hurt the stock in the near term. Shares have fallen 30% since the start of the year, as the costs to expand production contributed to two earnings misses.
Bielawski prefers to own the nuclear supply chain further upstream. Cameco, the Canadian uranium miner, is one of the world's largest producers of raw uranium and benefits directly as Western utilities scramble to replace Russian supply. Rising uranium prices flow straight to the bottom line.
He also likes AtkinsRéalis, the Montreal-based engineering company that designs, builds, and extends the life of nuclear plants globally. Two years ago, nuclear accounted for 15% of its revenue. Last quarter, nuclear made up 25%, after the company signed a multibillion-dollar contract to extend the life of four reactors at Ontario's Pickering station, a deal to build two new reactors in Romania, and a collaboration with Nvidia to design nuclear-powered AI facilities. Profits jumped 34% in the most recent quarter.
Clean-energy stocks are performing well, but they can still destroy capital if investors buy the wrong company at the wrong price. That is especially true after a rally.
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June 05, 2026 03:30 ET (07:30 GMT)
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