Going nuclear

I’m talking about nuclear energy. It could be the next big growth area as AI adoption progresses and investors look for the next batch of stocks that can benefit.

Training and running large AI models is hugely energy-intensive. I saw recently that data centres already consume almost 3% of global electricity, and that figure could double by 2030. Big tech firms are scrambling to secure clean energy to meet both sustainability goals and reliability needs. That’s where nuclear energy comes in.

Nuclear energy is carbon-free and highly reliable. This contrasts to solar or wind, which are intermittent. It’s true that in the past, people were more sceptical about nuclear with regard to being a clean-energy source. Yet here in the UK and in the US, governments are recommitting to extending plant lifetimes and investing in next-generation reactors.

When you put it all together, I think we could see a large push in the coming year and beyond for investment in nuclear power companies. This would likely come from both private firms seeking to power AI models and the public sector.

Zoning in

Believing in a theme’s one thing. The next stage is to go deeper and identify companies that could benefit. One example is NextEra Energy (NYSE:NEE). The US stock‘s up 8% over the past year.

It’s a leader in clean energy, with a large pipeline of renewables, storage and infrastructure projects. It’s in the news today (28 October) as it just entered a partnership with Alphabet regarding reviving an old nuclear plant in Iowa. I think this is just one sign of the direction that the company could be heading.

At the same time, this isn’t some kind of speculative energy operator. It has a solid balance sheet and steady cash flow from its regulated utility business, Florida Power & Light. It has a 2.63% dividend yield. Even though this might not be super attractive, banking income while waiting for a significant potential share price move is never a bad thing.

In terms of risks, new projects relating to nuclear are going to be very capital-intensive and expensive. If something goes wrong in this regard, it could spell serious financial trouble. There’s also a concern that I might be too early to buy a ticket for the nuclear train. NextEra might not rally for some time if investors believe there are bigger themes out there in the market.

Overall, I think nuclear’s going to be a big sector to watch for the coming year. I think NextEra’s one example of a stock that’s worth considering for investors.

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The stock market is processing the news that Donald Trump is going to be the next President of the USA. And the immediate response was very different across various sectors.

Financials, industrials, and energy shares climbed, while utilities, consumer staples, and property fell. There’s a clear theme here – and I think there’s a real opportunity.

Economic growth

In short, the stocks that have done well are the ones that are involved in US economic growth. Banks finance it, energy powers it, and industrials make it happen.

Norfolk Southern is a good example. As one of the six major US freight railroads, it stands to benefit from the need to transport materials and goods across the Eastern half of the country.

The stock climbed almost 10% following the election result, taking it to a 52-week high. That’s a clear sign investors think the election result is going to boost the industrial economy.

They may be right. But expectations are a lot higher now than they were before and that means there’s a much greater potential risk if things don’t turn out as anticipated.

Defensives

Not every company benefits from economic growth in the same way though. As GDP expands and contracts, demand for food, electricity, and real estate doesn’t change much.

These are the stocks that fared the worst. Shares in Colgate-Palmolive fell over 4%, mostly because its growth prospects aren’t particularly impressive in a growing economy.

In general, such shares that hold up best in a stock market crash. They’re typically resilient, meaning investors can look to them for stability when things go wrong.

When share prices start falling, it’s usually too late to buy these stocks. The time to be looking at them is when they’re out of fashion – and I think that’s now. 

A potential buying opportunity

One stock that stands out to me right now is NextEra Energy (NYSE:NEE). The company is a regulated utilities business that’s the largest generator of renewable energy in the US.

The market sees this as a bad combination right now and it’s easy to see why. The company’s modest growth prospects and Trump’s focus on oil and gas over wind and solar are both risks. 

From a long-term perspective though, I think things look very positive. If renewable energy is part of the long-term outlook for US energy, then NextEra is in a strong position.

NextEra Energy P/E Ratio & Dividend Yield 2015-24

Created at TradingView

The firm owns some of the best sites for wind and solar generation. And after falling 5%, the stock trades at an unusually low price-to-earnings (P/E) multiple with a 3% dividend yield.

Will the market crash?

I’ve no doubt the stock market is going to crash… at some point. What I don’t know however, is exactly when that will be. 

As an investor, I’d like to own stocks that will be resilient when share prices fall. But I want to buy them only when their valuations are attractive. 

I think the US election result might be a chance to do this. And NextEra Energy is just one of the stocks that I’m going to be looking at very carefully over the next few days.

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Costco

Top of my list is Costco. The stock is down around 17% since the start of the year and I think this could be a great time for me to pick up some shares.

Costco sells products that people use each day and it has a reputation for having the lowest prices around. I believe that this will allow it to do well as household budgets come under pressure.

With a price-to-earnings (P/E) ratio of around 35, the stock isn’t cheap and this brings risk. But the prospect of 11% forecasted earnings growth in a stable sector attracts me to Costco shares.

Experian

I also see Experian (LSE:EXPN) as one of the best stocks to buy now for my portfolio with inflation on the rise. The share price has fallen by 26% since the beginning of January.

Experian’s business is built on a database that is nearly impossible for a competitor to replicate. I think that this will help in an inflationary environment for two reasons. 

It means that the FTSE 100 business doesn’t have significant maintenance costs, protecting it from rising prices. It also allows Experian to increase prices, since competition is limited.

The risk with this stock comes with the possibility of rising interest rates reducing demand for loans. But I believe the decline in the company’s share price means that there’s still a return for me. 

Mastercard

I also have Mastercard as one of my best stocks to buy now. The stock is now 20% lower than it was at the beginning of the year.

I think that Mastercard actively stands to benefit from inflation. Higher prices mean bigger payment volumes, which in turn means more revenue for Mastercard.

The biggest risk is that rising interest rates might eventually cause payment volumes to decline as consumers spend less and save more. With inflation still high, though, I think this is some way off.

NextEra

Lastly, I have NextEra Energy (NYSE:NEE) on my list of stocks to buy now. Shares in the company have fallen by 20% this year.

NextEra’s business is protected from competition by regulation. In exchange, the amount that it is allowed to earn in net income is set at a defined level.

This means, however, that the company is allowed to increase its prices in order to offset higher input costs. And its regulatory protection means that there’s no possibility of consumers moving elsewhere.

Once again, the risk is that the stock is expensive. At a forward P/E ratio of around 23, it’s more expensive than other utilities stocks.

As I see it, though, the risk is offset by NextEra’s premium assets. It owns some of the best sites for wind and solar energy generation and I think that these will prove to be worth paying for today.

The post With inflation at 10%, what are the best stocks to buy now? appeared first on The Motley Fool UK.

When inflation is high, businesses have to pay more to produce the goods and services they sell. This leaves them facing a dilemma.

They can either fix the prices they charge their customers, which means they’ll make less profit. Or they can increase their prices and risk losing business.

I have a renewable energy stock in my portfolio that I think is well-protected against this inflation dilemma. The stock is NextEra Energy (NYSE:NEE).

NextEra Energy

NextEra is a utilities company based in Florida. The company has two main operations — a regulated utilities business and a renewable energy business.

The regulated utilities business makes up around 80% of NextEra’s overall revenues. It’s this part of the business that I think is protected against inflation.

The business is protected from competition in that it has a legal monopoly in the areas to which it provides electricity, meaning customers can’t easily change to another supplier.

In exchange for this protection from competition, regulators limit the amount of profit NextEra can make by charging its customers. Currently, the business is allowed to make a 10.6% return on its assets.

Importantly, though, NextEra is allowed to make that 10.6% return if its costs increase. In other words, if inflation makes NextEra more expensive to run — which seems likely to me — then it can increase its prices to customers to compensate for this.

As a result, I’m not concerned about the impact of inflation on NextEra’s business. Utilities tend to enjoy steady demand and NextEra’s regulatory protection should allow it to make money consistently, even if high inflation persists.

A buying opportunity

I own NextEra shares in my portfolio. I also think that now might be an attractive time to add more.

The stock isn’t especially cheap, trading at around 23 times next year’s anticipated earnings. To my mind, the biggest risk from an investment perspective is that valuation.

As I see it though, the company’s premium valuation is justified by the advantages it has over its competitors. Being one of the first companies to make substantial investments into renewables infrastructure has allowed NextEra to occupy some of the best sites for generating wind and solar energy in the US.

This kind of advantage is virtually impossible to replicate. Over time, I think it will prove to be extremely important.

Right now, oil prices are high as a result of supply shortages brought on by the Russian invasion of Ukraine. As a result, oil stocks are doing well as the outlook for oil seems positive.

While the broader market is looking at fossil fuels, I’m looking at the renewables sector. High oil prices mean that oil stocks should do well in the near future, but with my focus further into the future, I’m looking at companies that will be part of the energy chain for a long time to come.

Since I think that NextEra is one of the best renewable energy stocks around and will be for some time, I’m happy buying shares for my portfolio here.

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The world is continuing to move away from carbon-based fossil fuels in favour of cleaner alternative energy sources. Decarbonising the global economy will take an investment of over $100trn over the next three decades, experts have estimated.

So, with the rise of popularity in the renewable energy sector, is investing in renewable energy stocks a good idea? Let’s break it down.

What are renewable energy stocks?

Renewable energy stocks allow you to invest in companies at the centre of the green energy transition and will allow you to share in any successes these companies have along the way.

Renewable energy sources include solar power, wind, biofuels and even nuclear. These all aim to produce the energy we all require without emitting any (or much) carbon.

You may have seen examples of renewable energy in the form of wind turbines or perhaps solar panels on houses. These are becoming more and more common, demonstrating the rise in renewable energy, a largely emerging market.

Top renewable energy stocks in the UK

Here are some of the top renewable energy stocks by highest market cap:

SSE

Part of the FTSE 100, SSE was previously known as Scottish and Southern Energy. It is a multinational energy company headquartered in Perth, Scotland and operates across the United Kingdom and Ireland.

SSE develops, owns and operates low-carbon infrastructure designed to support the zero-carbon transition. This includes onshore and offshore wind, hydropower, electricity transmission and distribution grids, and efficient gas-fired generation. And the company is a large generator of renewable electricity and one of the largest electricity network companies in the UK.

In November 2025, management unveiled a transformational £33bn five-year investment plan – its most ambitious spending programme to date. The goal is to upgrade and expand its regulated UK electricity networks using £27bn, with the rest allocated towards renewables and flexible energy generation assets.

As of February 2026, this investment programme is well underway with a 64% surge in network investments reported following its third quarter trading update.

Greencoat UK Wind

Greencoat UK Wind is a listed renewable infrastructure fund invested in operating UK wind farms, which are generating income. The fund is a constituent of the FTSE 250. It offers an attractive, sustainable dividend, which increases in line with RPI, while preserving capital in real terms.

In the face of rising interest rates and falling energy prices, Greencoat has experienced higher levels of financial pressure in recent years. However, management has not sat idle. And throughout 2025, the company continues to optimise its portfolio, acquiring new assets while disposing of older, underperforming ones.

Subsequently, with financials being carefully managed, the firm has resumed its shareholder payout hiking scheme in 2026.

Greencoat UK Wind is currently invested in 49 wind farms, both onshore and offshore. Its net generating capacity is 2 gigawatts.

Ceres Power Holdings

Ceres Power Holdings’ main purpose is to help sustain a clean, green planet by ensuring there is clean energy everywhere in the world.

The company came out of Imperial College in London, where Professor Brian Steele invented the SteelCell. Since then, Ceres has been working to perfect this technology for almost 20 years, positioning itself as a global leader in fuel cells and electrochemistry expertise.

A fuel cell is a power generation unit that produces, without any burning, an electric current from a chemical reaction. Fuel cell generation results in energy with low or zero CO2 produced, as well as clean air with no particulates, SOx or NOx emissions.

Ceres wants to bring cleaner and cheaper energy to businesses, homes and vehicles. To do this, the company works with global partners to embed its technology in mass-market energy products.

The firm did run into a bit of trouble in 2025 when its partnership with Bosch was terminated in February due to a strategic restructuring. And in October, Bosch announced its intention to start selling its 17.4% stake in the business. This unsurprisingly caused significant share price volatility. However, the firm has still made some notable milestones since, particularly in India, where its demonstrator unit achieved its first hydrogen production.

ITM Power

ITM Power’s aim is to help the world reach net-zero through the power of green hydrogen. It is the first hydrogen-related company to be listed on the London Stock Exchange.

For over 20 years, ITM Power has designed and manufactured electrolyser systems that generate green hydrogen based on proton exchange membrane (PEM) technology. Its systems use just renewable energy and water, with oxygen and water vapour as the only by-products.

The company has made significant strides in 2025. Apart from being selected as a technology provider for a 50-megawatt green hydrogen project in Europe, it has also secured new contracts to supply electrolysis modules for Uniper.

Combined, the firm entered its 2026 fiscal year aiming to deliver double-digit revenue growth while simultaneously turning cash positive. Yet while its latest results showed strong revenue growth, losses continue to be substantial, with management pushing back its goal of becoming free cash flow positive.

It also works with partners – including Linde, Shell, Snam, Hyundai, and Honda – to scale its impact, industrial reach, and market penetration.

RELATED: Investing In Water Stocks In The UK

AFC Energy Plc

Surrey-based AFC Energy is a developer of alkaline fuel cells, which use hydrogen for electricity production. It does this to generate clean energy, offering strong performance and low operating costs as part of global efforts to decarbonise the industry.

Its Hydrogen Power (H-Power) systems use a patented design aimed at ensuring efficiency, robust quality and economic operation. It is also free of pollutants and greenhouse gases. 

The company aims to help all customers achieve a net-zero carbon future through continuous development and improvement of its product base.

It has undergone a transformation in recent years, which includes the launch of a strategic partnership with ABB in December 2020. This was designed to create the next generation of high-power electric vehicle (EV) charging solutions for grid-constrained locations across the globe.

In 2026, the firm continues to focus on hydrogen power generation with its H-Power system. Under the new leadership of John Wilson as CEO, the firm is seeking to expand its portfolio of hydrogen solutions.

Last year, the firm saw the launch of its new Hy-5 containerised, portable cracking module with a production capacity of 500kg per day. Skip ahead to February 2026, and the Environment Agency gave the regulatory green light to sell the hydrogen produced by the group’s ammonia cracker pilot plant, bringing the group one step closer towards commercial production.

This opens the door to new market opportunities, such as hydrogen fuel production for refuelling stations and off-grid power generation for recharging electric vehicles.

RELATED: FTSE 100 vs FTSE 250: What’s the Difference?

Investing in US renewable energy stocks

You may also want to consider investing in US renewable energy stocks. A lot of platforms in the United Kingdom allow you to invest in US companies.

Here are some US renewable energy stocks to consider:

• Tesla (NASDAQ:TSLA)
• Enphase (NASDAQ:ENPH)
• NextEra Energy (NYSE:NEE)
• Clearway Energy (NYSE:CWEN)
• Brookfield Renewable (NYSE:BEP)
• First Solar (NASDAQ:FSLR)

Are renewable energy stocks right for you?

Clean energy stocks will not be right for everyone. Whether they are right for you will depend on the makeup of your portfolio, your risk appetite, and your financial goals.

If you care about sustainability, climate change, and want to have a positive impact on the planet while hopefully making money too, then investing in renewable energy stocks may be right for you.

These are large companies with growth potential. However, the value of any company can go down or up. Make sure you do your own independent research before making any investment, including renewable energy stocks.

And if you want to gain exposure to the energy sector but don’t want to invest in individual energy stocks, check out the best UK energy ETFs.

The post Investing In Energy: Top UK Renewable Energy Stocks of 2026 appeared first on The Motley Fool UK.

The stock is NextEra Energy (NYSE:NEE). Let’s get it clear at the outset — the stock is expensive. It trades at a price-to-earnings (P/E) of around 45, which is high compared to the S&P 500 average and other utilities companies such as Dominion Energy and Sempra Energy. The high price represents a risk, but I think that the quality of its operations justifies its price tag.

The company has two parts to it. It has a regulated utilities business and a clean energy division. NextEra generates cash using its regulated operations, which it then invests using its renewables organisation. Its regulated utilities are among the best in the business and its renewables segment is the largest producer of wind and solar energy on the planet.

NextEra’s regulated utilities

Utilities like NextEra have protected, monopolistic status. In exchange, the amount that they can charge customers is regulated. The company’s asset base, multiplied by an allowed rate of return, plus its operational expenses, provides the amount the company can charge customers. The key is the allowed rate of return. This is determined by the regulator and it establishes the company’s net income.

Florida Power & Light (NextEra’s regulated utility) has an allowed rate of return of around 10.6%. This is unusually high, but there are two reasons for this. One is that the Florida authorities tend to be constructive in working with utilities companies. The second is that it’s one of the best utilities companies around.

NextEra’s regulated utilities business has consistently reduced costs to consumers and has an enviable record of providing power consistently, even during Florida’s hurricane season. As a result, it attracts favourable treatment from regulators and generates a steady stream of cash to invest in renewable energy projects.

Renewable energy

The regulated side of NextEra’s business is a bit like Berkshire Hathaway’s insurance operations. Its function is to generate cash that the company’s renewables division — NextEra Energy Resources — can deploy elsewhere. NextEra Energy Resources develops renewable energy assets and sells the energy that it produces. 

As an early adopter of renewable energy — especially from wind — it has established projects in some of the best geographic locations for both wind and solar generation. This gives the company a huge competitive advantage. The company sells the power it generates via contracts that last for decades, often with built-in price increases. 

Conclusion

I think that NextEra Energy is an amazing investment opportunity. Structurally, I think the company resembles Berkshire Hathaway, which is clearly a successful model. Add to this the company’s outstanding operations and the enviable quality of its assets and I’m happy buying shares for my portfolio today. I see this as a company in excellent shape to provide substantial returns over a long period of time.

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