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Unleashing Potential: Profiting from the Surge in Electricity Demand Unleashing Potential: Profiting from the Surge in Electricity Demand

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Electric consumption in the U.S. is on the brink of a momentous surge. This surge is being fueled by the fusion of artificial intelligence and electric vehicles, setting the stage for a remarkable uptick in electricity demand across America. In the wake of this impending surge, savvy investors are on the hunt for stocks poised to benefit from this escalating thirst for power. Yet, not all industry experts are singing a tune of unwavering optimism. Elon Musk, the esteemed CEO of Tesla (NASDAQ: TSLA), recently issued a stark warning, prophesying a dire shortage of electricity in the near future. Musk’s cautionary words have not fallen on deaf ears as others join the chorus, clamoring for a substantial increase in power generation.

According to Virginia-based power provider Dominion (NYSE: D) and reports from Georgia Power, the demand for electricity is expected to skyrocket by a staggering 85% over the next 15 years. Georgia Power even anticipates the need for power equivalent to what four new nuclear plants would generate by 2030. For those seeking to capitalize on this imminent surge in electricity demand, here are three stocks to consider:

Eaton Corporation (ETN)

An Eaton (ETN) sign on a company building.

Source: Lukassek / Shutterstock.com

Eaton Corporation (NYSE: ETN) specializes in providing equipment to electric power producers. In the last quarter, the company saw a remarkable 11% increase in revenue year-over-year, reaching $6 billion. Additionally, its operating cash flow surged by 9% to an impressive $1.3 billion. Looking ahead, ETN forecasts an approximately 11% increase in its earnings per share for 2024 compared to 2023, driven primarily by the robust growth in its electrical business unit, which saw its backlog rise by an impressive 15% over the previous year. With an attractive enterprise value to EBITDA ratio of 27 times, Eaton Corporation stands as a compelling option for investors eyeing the electricity demand upswing.

Powell Industries (POWL)

A concept image of electricity flowing between two disconnected electric cables.

Source: ESB Professional / Shutterstock.com

Specializing in equipment for electrical power producers, Powell (NASDAQ: POWL) is a strong contender in this space. With products like integrated power control room substations and medium-voltage circuit breakers in its portfolio, Powell has positioned itself as a key player in meeting the escalating demand for power. Notably, the Public Employees Retirement System of Ohio beefed up its stake in POWL, acquiring over 3,000 shares in Q3 2024, raising its total holdings to nearly 12,200 shares by the end of September. The tremendous growth trajectory of Powell is evident in its Q4 2023 numbers, where the company witnessed a staggering 53% increase in its revenue compared to the same period in the previous year, with the backlog nearly doubling in the last quarter alone.

First Solar (FSLR)


The Illuminating Rise of First Solar in the Solar Industry

Shining Light on Solar Panorama

First Solar logo on smartphone in front of computer screen with graphs. FSLR stock

Source: IgorGolovniov / Shutterstock.com

Ananlysts expect utility companies in America to purchase an unprecedented number of solar panels. This move will allow them to supply the amount of electricity that will be needed going forward. Nextracker predicts that the amount of energy generated by solar in the U.S. will increase at a CAGR of 26% between now and 2028.

Forecasting Success for First Solar

As a towering manufacturer of solar panels, First Solar (NASDAQ:FSLR) is in a prime position to benefit from this burgeoning demand. Indeed, industry analysts anticipate FSLR’s EPS to soar to $13.54 this year from $7.74 in 2023. Looking ahead to 2025, the mean estimate calls for the company’s EPS to ascend to $21.30.

Given these compelling factors, FSLR emerges as a beacon among stocks poised to reap the rewards of escalating electricity demand.

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

Larry Ramer has conducted research and written articles on U.S. stocks for 15 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been SMCI, INTC, and MGM. You can reach him on Stocktwits at @larryramer.