The alternative energy industry has been benefiting from explosive growth driven by artificial intelligence (AI)-led data center power demands and grid modernization. These companies are involved in the generation and distribution of alternative energy and electricity from sources like wind, solar, natural gas, biofuel, hydro, geothermal and nuclear.
According to a Wood Mackenzie report, energy sector investment is rising and is on track to exceed $3.8 trillion by 2030. Such investments provide strong growth opportunities for industry participants.
The Zacks defined Alternative Energy - Other industry is currently in the top 43% of the Zacks Industry Rank. Since the industry is ranked in the top half of the Zacks Ranked Industries, we expect it to outperform the market over the next three to six months.
At this stage, it will be prudent to invest in alternative energy stocks with a favorable Zacks Rank. We narrowed our search to three such stocks that have surged year to date. Despite the rally, their current favorable Zacks Rank indicates more upside in the second half.
The companies are: Bloom Energy Corp. BE, FuelCell Energy Inc. FCEL and GE Vernova Inc. GEV. Each of our picks currently carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our three picks year to date.
Image Source: Zacks Investment Research
Bloom Energy Corp.
Zacks Rank #1 Bloom Energy generates and distributes renewable energy supplying electricity to the residential, commercial and industrial sectors. BE is well-positioned to benefit from key long-term trends, including the rapid expansion of AI infrastructure, grid capacity constraints, increasing demand for reliable and affordable power, and government initiatives promoting energy independence and domestic manufacturing.
BE’s Energy Server platform delivers scalable, onsite power by connecting directly to customers' electrical systems, reducing reliance on traditional transmission networks. Built on Bloom's proprietary solid oxide technology, the platform is expected to see rising adoption from AI data centers, cryptocurrency mining facilities, advanced manufacturing and other power-intensive industries.
BE and Brookfield have significantly expanded their strategic partnership, increasing the planned deployment of AI-related power infrastructure from $5 billion to $25 billion. The fivefold expansion reflects the surging demand for reliable, scalable electricity as AI fuels a global wave of hyperscale data center development.
Solid Estimate Revisions
Bloom Energy has an expected revenue and earnings growth rate of 83.9% and more than 100%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 66.9% in the last 90 days.
BE has an expected revenue and earnings growth rate of 66.9% and more than 100%, respectively, for the next year. The Zacks Consensus Estimate for next year’s earnings has improved 1% in the last 30 days.
FuelCell Energy Inc.
Zacks Rank #2 FuelCell Energy is a clean energy company that develops and provides stationary fuel cell systems for on-site, continuous power generation. FCEL’s technology produces electricity through an electrochemical process, resulting in low emissions, and can also generate hydrogen, heat, water and support carbon capture.
FCEL is increasingly aligning with the fast-growing AI and high-density data center market, where grid constraints and power shortages are driving demand for behind-the-meter baseload power. By early 2026, data centers accounted for more than 80% of its commercial pipeline, while its fiscal second quarter pipeline reached 4 GW, up 267% sequentially, with about 89% of proposals tied to data centers.
FCEL’s technology offers direct current (DC) power, modular scalability, integrated cooling, and standardized 12.5-MW FuelCell Energy Blocks designed to reduce repeat engineering and permitting work. With proposals submitted and financing partners engaged, conversions could drive backlog growth and multi-year revenue expansion.
Solid Estimate Revisions
FuelCell Energy has an expected revenue and earnings growth rate of -2.8% and 59.4%, respectively, for the current year (ending October 2026). The Zacks Consensus Estimate for the current year’s earnings has improved 10.6% in the last 60 days.
FCEL has an expected revenue and earnings growth rate of 67.2% and 27.1%, respectively, for the next year (ending October 2027). The Zacks Consensus Estimate for next year’s earnings has improved 35.1% in the last 60 days.
GE Vernova Inc.
Zacks Rank #2 GE Vernova stands to gain from global nuclear power energy momentum, particularly through its strong forte in producing SMRs. GEV cemented its standing as one of the biggest long-term winners in the AI-boosted energy boom across nuclear, natural gas, electrification, and grid expansion.
The rapid buildout of AI data centers is forcing utilities to upgrade transmission networks and add new generation capacity, especially natural gas plants that can provide reliable baseload power. This trend is creating strong demand for GEV’s gas turbines and grid solutions.
Last year, GEV signed an agreement to supply 29 LM2500XPRESS units to Crusoe AI data centers, highlighting the growing importance of its turbine technology in supporting AI infrastructure. This development is expected to further strengthen GE Vernova's gas turbine business. As AI continues to increase electricity consumption, GEV appears well-positioned to capitalize on this trend and further strengthen its leadership in gas power.
Solid Estimate Revisions
GE Vernova has an expected revenue and earnings growth rate of 19.2% and 73.3%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 0.2% in the last 30 days.
GEV has an expected revenue and earnings growth rate of 14.3% and -20.2%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 0.2% in the last 30 days.
Radical New Technology Could Hand Investors Huge Gains
Quantum Computing is the next technological revolution, and it could be even more advanced than AI.
While some believed the technology was years away, it is already present and moving fast. Large hyperscalers, such as Microsoft, Google, Amazon, Oracle, and even Meta and Tesla, are scrambling to integrate quantum computing into their infrastructure.
Senior Stock Strategist Kevin Cook reveals 7 carefully selected stocks poised to dominate the quantum computing landscape in his report, Beyond AI: The Quantum Leap in Computing Power .
Kevin was among the early experts who recognized NVIDIA's enormous potential back in 2016. Now, he has keyed in on what could be "the next big thing" in quantum computing supremacy. Today, you have a rare chance to position your portfolio at the forefront of this opportunity.
See Top Quantum Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
FuelCell Energy, Inc. (FCEL): Free Stock Analysis Report
Bloom Energy Corporation (BE): Free Stock Analysis Report
GE Vernova Inc. (GEV): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).