ETFs
19 stocks and ETFs to benefit from the electrification theme – BofA
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Analysts at BofA Securities have listed 19 investment options for exposure to the electrification theme of future technologies.
According to BofA’s RIC report, manufacturing, data centers, artificial intelligence and the push toward electrification will add strong demand to “an already strained power grid,” analysts said.
“Intermittent wind and solar power cannot provide the energy needed and tight supply could lead to higher prices, bottlenecks and outages,” wrote strategist Jared Woodard.
He said that technology (XLK) investors can price energy suppliers that may not exist.
For example, Nvidia (NVDA) is expected to sell $150 billion worth of data center GPUs by 2027. Analyst Vivek Arya said that would translate to about 3.5 million GPU sales in the United States.
“Every Blackwell AI GPU sold by Nvidia (NVDA) consumes up to 1,200 watts of energy, so 3.5 million of them would consume 1.8 gigawatts of energy in the United States alone,” Woodard said.
These “first round” winners from new technology demand, such as data centers, hyper-scalers and chipmakers, are already well-held, he said. “Additional investments in these beneficiaries should be conditional on a realistic strategy for expanding electricity supply. In other words, the new big digital darlings can still win, but the old real world may have to win first.
Here are BofA Research’s top stocks and ETFs for North American future technology power:
Within raw materials:
- Direxion Auspice Broad Commodity Strategy ETF (NYSEARCA:COM) – Top Rated Commodity ETFs
- BHP Group Ltd (BHP) – The largest copper mine in the world
- Freeport-McMoRan Inc. (FCX) – Exposure to prime copper
Within nuclear power:
- Global X Uranium ETF (NYSEARCA:URA) – Top rated nuclear ETF with physical exposure to uranium
- Cameco Corp.CCJ) – Leading uranium miner, growing contract book
Within public services:
- Pinnacle West Capital Corp.PNW) – Exposure to the attractive Sunbelt region
- Entergy Corp.ETR) – Exposure of the geographic mix at the request of data centers
- Xcel Energy Inc. (XEL) – The withdrawal of coal-fired power plants creates new demand
- Public Service Business Group Inc. (ANKLE) – Nuclear assets attract technologies and data centers
Within manufacturers:
- Eaton Corp.AND N) – Rapid growth in turnover, relocation of the beneficiary
- Vertiv Holdings Co.VRT) – Thermal products, keys to the development of AI
- Aspen Technologies Inc. (AZPN) – Positive outlook for grid software
- GE Vernova Inc. (GEV) – Growing demand for network and energy equipment
- Caterpillar Inc.CAT) – Backup generators
In the oil and gas sector:
- Invesco Energy Exploration & Production ETF (PXE) – Top Rated Oil Exploration & Production ETF
- VanEck Oil Services ETF (OIH) – Top Rated Oil Services ETF
- WMB The Williams Cos Inc. (WMB) – The key to the intermediate sector to safeguard renewable energies
- Common LP units of energy transfer (AND) – Permian pipelines to data centers
- Kinder Morgan Inc.KMI) – Permian pipelines to data centers