Clean Energy Stocks Offer Buying Opportunity After 14% Drop, JPMorgan Says

A recent selloff in clean energy and power infrastructure stocks has created an attractive buying opportunity ahead of second-quarter earnings, according to analysts at JPMorgan. The bank maintains that fundamental demand drivers remain strong despite a 14% drop in the sector over the past two months.

Pullback Presents Entry Point

While the clean energy sector has outperformed the broader market year-to-date, its recent decline offers a chance for investors to add exposure, the brokerage noted in a recent report. JPMorgan expects continued order momentum and growing project pipelines to support the sector's performance.

Ahead of upcoming earnings reports, the bank identified its top picks in the space:

• GE Vernova (GEV)
• Innio (INIO)
• SOLV Energy
• Nextpower (NXT)

Data Centers and Electrification Drive Demand

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JPMorgan stated that the most compelling investment theme is in baseload power technologies, driven by surging electricity demand from artificial intelligence data centers, industrial electrification, and a resurgence in U.S. manufacturing. The bank anticipates generally positive quarterly updates and expanding backlogs for gas turbines, battery energy storage systems (BESS), and geothermal projects through the end of the year.

Recent reports of data center project delays are viewed by the bank as largely project-specific issues that do not alter the strong long-term demand outlook. However, JPMorgan cautioned that political debate ahead of the U.S. midterm elections could create near-term market volatility.

Sector Headwinds and Outlook

The bank expressed a preference for utility-scale solar and storage projects, noting that the recovery in the U.S. residential solar market is likely to be gradual rather than sharp. It also anticipates further industry consolidation, with larger, well-capitalized firms gaining market share on increasingly complex projects.

Still, analysts warned that parts of the solar industry face uncertainty related to U.S. polysilicon tariffs, rules regarding foreign entities of concern (FEOC), and ongoing permitting challenges. JPMorgan suggested that greater policy clarity later this year could improve financing conditions and support new investment in the sector.