The power supply shortage brought about by artificial intelligence has driven the entire U.S. stock power sector to rise this year, but as valuations have reflected most of the optimistic expectations, investors will turn their attention to companies' actual execution capabilities next year.
This year, the U.S. power sector has experienced a rare comprehensive rise, with significant increases from clean energy to coal, and from mature technologies to speculative projects, driven primarily by the power supply gap created by AI data centers.
The annual increase of U.S. renewable energy ETFs has reached 50%-60%, with nuclear power and natural gas equipment manufacturers' stock prices doubling, and even fuel cell companies' stock prices soaring threefold, while coal stocks have also risen by about 50%. According to JP Morgan stock analyst Mark Strouse:
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2025 is still early in the cycle, and investors only need to gain exposure to AI. But by 2026, we need to see actual transaction announcements and order accumulation.
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Currently, most power stocks have reached historical high valuations, with some companies even surpassing tech giants. Once the supply shortage shifts from a positive to a constraining factor, this &#34;everyone wins&#34; energy trade may be difficult to sustain.
<h2>Comprehensive Rise from Nuclear Power to Coal</h2>
This round of power sector increases covers a wide range.
Uranium miner Cameco has risen about 80% this year, nuclear power plant operator Constellation Energy has increased by about 60%, and even the speculative small modular reactor stock Oklo has more than doubled this year. The Trump administration's executive orders accelerating nuclear energy applications have provided additional momentum for the sector.
Equipment manufacturers have also performed strongly. Natural gas turbine manufacturer GE Vernova's stock price has doubled, driven by long-standing backlogged orders that have increased demand for smaller power equipment that is easier to obtain but more expensive.
Engineering machinery manufacturer Caterpillar and engine manufacturer Cummins, which produce small turbines, have risen by about 60% and 50%, respectively. Fuel cell company Bloom Energy's stock price has tripled.
Even the coal industry has seen an increase, with Peabody Energy rising about 50% this year. The U.S. Energy Information Administration estimates that U.S. coal consumption will increase by 9% this year compared to 2024, driven by rising electricity demand.
<h2>&#34;Catch-Up Trade&#34; in Renewable Energy</h2>
The U.S. renewable energy sector started weakly this year, as the &#34;Inflation Reduction Act&#34; included cuts to subsidies for the industry.
However, this summer, as the reduction in renewable energy tax credits and eligibility rules became clearer, the sector began to recover. Subsequently, investors focused on the growth of AI power demand triggered a wave of &#34;catch-up trades.&#34;
Invesco WilderHill Clean Energy ETF and Invesco Solar ETF have risen approximately 60% and 50% respectively so far this year.
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/4720d514-500e-4ffe-8b5e-2df2c4d28179.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/4720d514-500e-4ffe-8b5e-2df2c4d28179.png"/> (Invesco Solar ETF has accumulated a rise of about 50% this year)
Geothermal energy company Ormat Technologies rose by about 65%. The company stated that it is negotiating with data center customers regarding its existing geothermal facilities to sign power purchase agreements at higher prices after the contracts expire.
Analysts believe that although some clean energy stocks have risen this year, the valuation multiples have not expanded, indicating that profit expectations have not increased.
The forward price-to-earnings ratio of renewable energy leader NextEra Energy is basically flat compared to the beginning of the year, remaining at around 20 times.
The valuation multiple of U.S. solar manufacturer First Solar has expanded to 12 times this year, but it is still cheap relative to its historical average.
<h2>Valuations Have Reached High Levels</h2>
The valuations in most electricity sub-sectors have reflected a large amount of optimistic expectations, which means that more positive news is needed to drive stock prices further up, while a small amount of bad news could lead to declines.
Companies whose valuations are most directly related to AI power demand have exceeded those of tech giants. Constellation Energy, GE Vernova, and Cameco all have forward price-to-earnings ratios exceeding 30 times.
The forward price-to-earnings ratio of fuel cell manufacturer Bloom Energy has reached 90 times, making it one of the most expensive in the energy sector.
The valuations of turbine manufacturers are also relatively high, with Caterpillar and Cummins trading at prices 50% and 44% higher than historical valuations, respectively.
Companies with zero or very little revenue are the most likely to experience corrections.
This includes small modular reactor startups Oklo and NuScale Power, as well as Fermi, which plans to build a combined nuclear and natural gas power plant for data centers. The latter saw a significant drop this month after a potential tenant withdrew from an agreement providing $150 million in construction funding.
Supply shortages have been beneficial for energy stocks this year, but may turn into a disadvantage in the future.
According to Wood Mackenzie research analyst Joseph Shangraw, engineering, procurement, and construction contractors are in short supply as they are taking on data center and natural gas power generation projects, drawing skilled labor away from solar projects. Such physical constraints may lead to a divergence of winners and losers in the industry.
Risk Warning and Disclaimer
The market has risks, and investment should be cautious. This article does not constitute personal investment advice and does not take into account the specific investment goals, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article align with their specific circumstances. Investment based on this is at their own risk

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The U.S. stock power sector has risen sharply due to the AI power supply gap, covering clean energy, nuclear power, coal, and more. Renewable energy ETFs have increased by 50%-60%, while the stock prices of nuclear power and natural gas equipment manufacturers have doubled, and fuel cell companies' stock prices have surged threefold. Analysts expect that next year investors will focus on corporate execution capabilities, with current valuations reaching historical highs

- The U.S. electricity sector has experienced significant gains this year, driven by AI-related power supply shortages, affecting various energy sources from clean to coal.  
- However, with valuations peaking, investors are shifting their focus to companies' execution capabilities for 2026, as the current supply gap may become a limiting factor.  
- Forecasts show that while there are gains in clean energy, many companies' valuations have already absorbed optimistic expectations, indicating a potential risk should negative developments emerge.

From photovoltaics, nuclear power to coal, "taking off across the board," how long can the "AI power supply" theme in the US stock market last?