When a $2 trillion company spends big on green energy, smart investors listen.
Here’s a number for you to ponder. E-commerce behemoth Amazon.com Inc. (Nasdaq: AMZN) is on track to power all of its operations with renewable energy by 2025. That’s three short years away.
And that’s not all…
- By 2040, Amazon wants to be carbon neutral.
- It’s also the proud owner of the largest rooftop solar array (17,000 solar panels across 19 acres) in the state of Colorado.
- And it’s building a massive offshore wind farm in the Netherlands that should more than cover all of its electricity needs in Europe.
I could go on all day, but you get the point.
Now, you could try to write this off as a publicity stunt. Large companies love to project the image of model corporate citizens. And there’s no better way to get into the good graces of government and institutional investors than by showing off your green bona fides.
But here’s the thing. It’s not just Amazon…
Corporations Lead the Green Energy Charge
While Amazon led the pack last year by purchasing 6.21 gigawatts of renewable energy, Microsoft was nipping at its heels at 6.16 gigawatts. Meta (formerly Facebook), Alphabet (Google) and even a host of non-tech companies like Nestle and Target also topped the list of corporate green energy buyers.
All told, corporations purchased a record-breaking 31.1 gigawatts last year — a 24% increase from 2020.
I find that mixing politics and investing isn’t a great idea. Emotions drive politics, and the key to long-term investment performance is remaining emotionally detached. Furthermore, politics are subject to change depending on what party happens to be in power that day.
That’s why I find this so intriguing.
These companies are not gobbling up green energy due to government mandates. They’re doing it because it’s what their large institutional investors want. That’s very distinct… and very American! It’s the governments of most countries that push for greener energy. Here, it’s the private sector!
What This Means for Investors
The trend is in place. We’d be fools not to try and profit from it.
Basic economics dictate that the world will get greener. New wind and solar projects now produce energy more cheaply than natural gas.
There are still issues to be resolved, of course. Solar energy needs a shining sun, and wind energy only works when the breeze blows. But improvements in energy storage and transmission are fixing those issues.
In Green Zone Fortunes, we consider the transition to green energy to be one of the great investment themes of our lifetimes. We’ve already made several recommendations in the space, including a major energy infrastructure company and multiple leaders in the battery technology space.
I’m writing up a recommendation of a gritty “old economy” stock that is using carbon-capture technology to massively lower its environmental footprint. And you can bet I’ll be on the lookout for more opportunities within green energy going forward.
To join my Green Zone Fortunes readers and see how you can invest in the future of green energy (along with some of my other top mega trends of the next decade), click here.
To good profits,
Adam O’Dell
Chief Investment Strategist