Top 5 Best Climate Tech Stocks to Watch
Green business isn’t just the future - it’s also the present. The concept of ‘green’ companies and hence, best climate tech stocks to watch, go hand-in-hand.
With a potential climate collapse becoming a very real possibility, companies have sprung to action in an attempt to join the push for sustainability.
As a direct result, climate tech stocks have become an interesting option for investors and traders, alike, who can now directly contribute by supporting these green initiatives.
In this article, we will take a look at the best climate tech stocks to watch (based on the subjective outlook of the author), the advantages and disadvantages, and how you can either trade or invest in the best climate tech stocks to watch.
Sounds interesting, right? Let’s begin!
Table of Contents
Best Climate Tech Stocks: An Introduction
Support for green and sustainable technologies has significantly increased in recent years. Climate change is already a reality, for example, global warming.
Extreme climate and weather events are far more common than they were in the past. As we get closer to the tipping point, companies have begun to take action in order to try and contribute positively to change.
Climate tech stocks are drawing attention from investors and traders, alike. No longer a niche market, green and sustainable tech companies are now viable investments.
In this scenario, some companies have already set themselves apart from the competition as leading forces in the market.
What are Climate Tech Stocks?
Climate tech stocks is a very general term, which groups different companies under the same umbrella.
As the term itself suggests, climate tech stocks are related to companies that are actively invested in coming up with sustainable solutions to deal with climate change. Naturally, this applies to different companies, all coming from a wide range of sectors.
You will find that the best climate tech stocks aren’t restricted to renewable energy. Some of them also produce durable goods, others are involved in tech or even directly in finances.
For investors, buying climate tech stocks means contributing towards a sustainable future.
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Best Climate Tech Stocks to Watch: Advantages and Disadvantages
As with any other investment, climate tech stocks come with pros and cons. We will now take a look at some of the advantages and disadvantages of investing in climate tech stocks.
Advantages of Climate Tech Stocks
- Investing in climate tech stocks also means contributing towards companies that are committed to a sustainable future. Investors will also be doing their part.
- Climate tech stocks have been performing better than other traditional stock markets, even in periods of economic uncertainty.
- Climate tech companies largely improve their image and marketability, which can positively affect the given stock.
Disadvantages of Climate Tech Stocks
- Just like any other stock market, climate tech also has high volatility as a potential negative.
- There is an increasing number of green companies joining the market, which could oversaturate it.
- As the green bubble continues to grow, so does the fear of a potential burst. It’s difficult to tell how sustainable this growth is, so this is something worth monitoring.
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Top 5 Best Climate Tech Stocks to Watch
We will now take a look at the best climate tech stocks available, listing some of the pros and cons of trading and/or investing in them.
1. Brookfield Renewable Corporation (BEPC)
Brookfield Renewable Corporation is one of the biggest names in the renewable power industry. The company owns and operates multiple assets, including hydroelectric, wind and solar power plants.
Advantages:
- As an ESG-compliant company that’s also part of a very attractive field, BEPC presents itself as a very solid investment option.
- Brookfield Renewable Corporation has a diversified cash flow, giving it financial flexibility and sustainability in the long run.
- Has a proven track record in its investments. BEPC continues to fuel its growth with value acquisitions.
Disadvantages:
- Relatively expensive stock.
- Despite its strong growth in recent years, it will be difficult for Brookfield Renewable Corporation to keep up the pace. The company's growth rate is expected to slow down slightly over the next few years.
- Relatively low returns when compared to other big names in the climate tech stocks.
You can invest in BEPC shares directly at Admiral Markets via Invest.MT5.
2. First Solar Inc (FSLR)
First Solar Energy is a solar panel and solar energy solutions company. FSLR is present in multiple countries aside from the US, including Australia, Canada, France and Japan.
Advantages:
- First Solar’s stocks are relatively cheap for the value they offer.
- Solar energy continues to grow in popularity, and First Solar is one of the major names in the market. The future looks extremely promising.
- Has the potential to grow even more in the future.
Disadvantages:
- High volatility over a relatively small period.
- Most solar energy companies operate on relatively fine margins, and that’s also First Solar’s case.
- While First Solar has grown considerably in a short period of time, that rate is bound to slow down.
You can trade FSLR CFDs (Contracts for Difference) in both price directions or invest in the shares directly.
3. TESLA Motors Inc (TSLA)
Tesla is a well-known name, even outside the green tech industry. The electric vehicles manufacturer and clean energy company, which has Elon Musk as its CEO, is among the biggest hitters among climate tech companies.
Advantages:
- Tesla carries a strong name, being one of the most recognizable brands in the electric vehicles market.
- Tesla’s profits have been growing at an incredible pace.
- Tesla continues to expand its production lines and the EV models on offer.
Disadvantages:
- Although Tesla is one of the leading names in EV manufacturing, it’s facing increased competition in what is set to become a crowded market.
- As a big name in the market, Tesla’s stock is naturally sold at a premium.
- The Elon Musk factor. Musk’s highly controversial personality can damage Tesla’s value.
There is the option to trade the TSLA CFD in both price directions or invest in the shares directly.
The below TradingView chart shows the Daily fluctuations of TSLA, as a visual display of the ongoing price movements:
*Past performance is not reflective of future results.
4. Aker ASA (AKER)
Aker ASA is an industrial investment company from Norway. Aside from clean and green renewable solutions, Aker also operates in multiple other segments, from durable goods to software development.
Advantages:
- Steadily increasing investments in renewable energy.
- A diversified portfolio that also includes SalMar (offshore salmon farming), Aker BioMarine (biotech), Cognite (industrial data software) and Aize (data tool).
- A lot of potential to grow in the future.
Disadvantages:
- It's not as much of a green tech company as some of the other options listed here. However, Aker ASA’s portfolio includes both renewable energy sources and fossil fuels.
- Net assets recently lost value following a drop in oil prices.
- The stock was trending down in the first half of 2023.
You can trade the AKER CFDs in both price directions, or invest in AKER shares directly.
5. Trane Technologies PLC (TT)
Trane Technologies is an Ireland-based company. TT designs and manufactures heating and ventilation products and has since expanded to provide green energy solutions.
Advantages:
- Offers good value for its investors.
- Stocks have been trending up over the past few years.
- Has frequently outperformed expectations.
Disadvantages:
- High R&D costs, which can take a toll.
- Trane Technologies’ private equity has decreased over the past year.
- Despite some expansion plans, TT offers its services to a relatively limited number of markets outside its native Ireland.
With MetaTrader 5, you can trade the TT CFDs in both price directions, or invest in the shares directly.
How to Buy Climate Tech Stocks
There are various different ways to buy climate tech stocks if you want to add them to your portfolio.
At Admiral Markets, one of the options is investing directly. That’s not the only option available, as you can also trade climate tech stocks without necessarily owning them.
Admiral Markets also offers climate tech stocks CFDs. A CFD, short for Contract for Difference, lets you trade a stock without having to acquire the asset itself.
In a CFD, you and the broker will be bound by a contract, and you will be paid the difference between the asset’s current price and the one at the start of the contract.
At Admiral Markets, you can do both investments via MetaTrader 5 - a modern, easy-to-use tool which includes the following features:
- Charts.
- Free market data and news.
- Educational tools.
- Access to thousands of markets.
Have you tried using the free MetaTrader 5 tool to analyse various stock movements, apply indicators or improve your strategy? Gain access to the MT5 platform today with Admiral Markets – Click the banner below to get started:
Best Climate Tech Stocks: Conclusion
The climate tech stock market is the future, and also the present. Investing in climate tech stocks can be a way to diversify your portfolio while also helping companies that are working towards a greener, more sustainable future.
This market is still growing and will likely offer more opportunities in the future. However, keep in mind that the fear of this green bubble 'bursting, so to speak, is a potential outcome.
Other than that, the climate tech stocks market presents essentially the same risks, namely volatility, as other stock markets.
If you’re ready to register a free live account with Admiral Markets and start your trading journey, click the banner below to register now:
What are the best climate tech stocks?
In regards to the best climate tech stocks, this is always a subjective question dependent on the individual investor. Some of the leading companies one could consider: Tesla, First Solar, SDIC Power Holdings. It is crucial to always consider your risk tolerance.
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