It’s no secret that the tech-heavy Nasdaq Composite (NASDAQINDEX: ^IXIC) has led the major indices in recent years, as artificial intelligence (AI) stocks power markets higher. But so far in 2025, clean energy stocks have left the Nasdaq in the dust, with the iShares Global Clean Energy ETF (ICLN +1.58%) returning 46% year to date, compared to the Nasdaq’s 20% rise.

iShares Trust – iShares Global Clean Energy ETF

Today’s Change

(1.58%) $0.27

Current Price

$17.30

The clean energy ETF is even handily outperforming Nvidia, as the poster child of the AI revolution is up 38% year to date. The rally is unfolding as electricity generation from renewable energy overtakes that of coal for the first time, according to the think tank Ember, while California, the world’s fifth-largest economy, is now getting 66% of its energy from clean power, up from 41% in 2015.

With a rally this pronounced, why is no one talking about a clean energy boom in the stock market? Part of the reason may be the Trump administration’s well-known antipathy toward renewables, as many investors wait for the next shoe to drop on the sector after his Big, Beautiful Bill, passed in July, stripped it of valuable tax credits.

But President Donald Trump’s megabill may have one unintended consequence: By forcing companies to begin clean energy projects by July 2026 or lose valuable tax credits, a national race is now ensuing to build solar farms, wind turbines, and batteries. This is why Bloomberg New Energy Finance (NEF), an analyst group, just ramped up its forecast for how much power generation these projects will generate by 10%.

This short-term manufacturing race has helped fuel clean energy’s rally, and three stocks in particular are positioned for upside as the global $110 trillion energy transition unfolds.

1. NextEra Energy

According to the Energy Information Administration, renewable energy and batteries will make up 93% of the capacity added to America’s power grid, and it’s a big world out there. In July, solar became the European Union’s single biggest source of power, while in the first half of 2025, China installed more solar capacity than the rest of the world combined.

The clean energy transition is well underway, and markets are reflecting this reality. And that’s great news for NextEra Energy (NYSE: NEE), a world leader in wind, solar, and battery storage.

The company is the biggest supplier of energy infrastructure in the United States, and its subsidiary, Florida Power & Light, plans to add 8 gigawatts of solar and battery storage by 2029. For context, these clean energy projects would power about 6 million homes.

Last quarter, NextEra grew earnings by a robust 25% year over year, while revenue grew by 10.4%. The company’s operating margin of 33.8% is nearly double that of the average utility company.

These superior fundamentals help explain how NextEra has grown adjusted earnings per share (EPS) by 10% a year, on average, over the last decade, compared to the 3% yearly adjusted earnings growth per share its industry peers have achieved.

NextEra has raised its dividend every year since 1994, including an increase of 10% announced last spring. Management is targeting another dividend hike of 10% next year. Considering that the company already pays a dividend of 2.7%, more than double the S&P 500 average, this dividend policy makes NextEra a strong income play as decarbonization efforts play out.

2. First Solar

First Solar (FSLR +14.28%) is the largest manufacturer of solar panels in the United States. Its shares are up 38% year to date as it taps into the global solar boom. Last quarter, its earnings per share beat analysts’ estimates by 19.55%, while gross margin rose to 46%, up from 41% in Q1. Revenue also climbed by $800 million from Q1.

Despite its rally this year, First Solar is still enticingly valued, with a price-to-earnings ratio (P/E) of 20.6,compared to the S&P 500 average of 30.2. Meanwhile, analysts are forecasting 56.8% growth for the company next quarter — and these are the same analysts who have lowballed First Solar’s sales growth in each of the last four quarters, underestimating the company by as much as 77%.

For investors looking for a renewable energy play that’s both a value and growth story, First Solar is a savvy choice.

3. iShares Global Clean Energy ETF

The aforementioned iShares Global Clean Energy ETF (ICLN +1.58%) offers investors a catch-all way to play the clean energy trend. The fund, which has $1.7 billion in assets under management, tracks the performance of approximately 100 clean energy securities.

The ETF is well-diversified, with its largest holding, First Solar, accounting for just 9.4% of its total assets. The fund offers exposure to fuel cell companies, wind turbine manufacturers, and utility firms, to name a few sectors, with over 50% of its holdings in utilities. That’s a good thing for investors craving income and stability in a sector that can be volatile. (The utilities are sometimes called “widow and orphan stocks” in a reference to their dependability as dividend payers.)

The iShares Global Clean Energy ETF has an expense ratio of 0.39%, which is cheap, compared to the average expense ratio of 0.48% to 0.69% for actively managed ETFs. For investors seeking a way to profit from the sector’s ascendance without pinning their hopes on any one company, the iShares Clean Energy ETF is an attractive option.