Street Calls of the Week
It’s no secret that the Trump administration is skeptical, to put it mildly, of alternative energy. If that was a signal for investors to dump clean-energy stocks and favor the familiar names in the business of extracting fossil fuels, the crowd didn’t get the memo.
A set of ETFs shows that the alternative energy shares are leading Big Oil by a wide margin this year. Based on the average for the five biggest alt-energy ETFs, this benchmark is up nearly 25% year to date through Sep. 10.
That’s far ahead of the 5.7% rise for Energy Select SPDR ETF (NYSE:XLE), a proxy for the leading oil majors, such as Exxon Mobil (NYSE:XOM) and Chevron (NYSE:CVX). Note, too, that the alt-energy average is also outperforming the broad US stock market’s 12.0% rise so far in 2025 via SPDR S&P 500 ETF (NYSE:SPY).
The strongest performer in the chart above: VanEck Uranium and Nuclear ETF (NYSE:NLR), which has exploded more than 50% this year. But the rally is broad-based. Consider that iShares Global Clean Energy ETF (NASDAQ:ICLN), a diversified portfolio across alt energy industries, is up more than 29% this year. The fund’s top holdings include First Solar (NASDAQ:FSLR) and Vesta Wind Systems (VWS).
It’s interesting that alt-energy’s outperformance has come in the wake of the rebound from the tariff shock in April. Prior to President Trump’s announcements of tariffs, Big Oil had been outperforming.
One theory for the renewed interest in renewable energy is the growing recognition that artificial intelligence (AI) will spawn a massive increase in demand for electricity. “The market is telling you that AI is the biggest thing we’ve seen in our entire careers,” said Karim Moussalem, chief investment officer of equities at London-based Selwood Asset Management LLP.
To meet the AI-driven surge in energy demand, renewables will need to play a key role “because they’re the fastest to market.” Analysis by BloombergNEF projects that renewables are expected to provide more than half of the additional power generation capacity by 2035.
“It’s a pretty simple story: It’s a story of supply and demand,” observed David Hill, the executive vice president of energy at the Bipartisan Policy Center and former general counsel at the US Energy Department, in June.
“Global electricity demand from data centers is set to more than double over the next five years, consuming as much electricity by 2030 as the whole of Japan does today,” said IEA Executive Director Fatih Birol in April.