(Bloomberg) — Clean-energy stocks are extending their rally into 2026 on optimism over artificial intelligence demand, while oil companies are under renewed pressure as prices dip.
The S&P Global Clean Energy Transition Index, tracked by more than $5 billion in exchange-traded fund assets, has risen over 3% in the first few trading sessions of the year and its WilderShares peer has climbed more than 8%. In contrast, a benchmark of oil and gas producers has slipped 1%.
Oil suffered its steepest annual decline since 2020 last year on signs that output increases from OPEC+ and other producers are outpacing tepid demand growth. Any uptick in sales of Venezuelan barrels would put further downward pressure on prices.
Green stocks emerged as market leaders last year as interest rates eased. They outperformed the S&P 500 Index, Bitcoin, and even gold at one point, despite pushback against climate policy in the US and Europe.
The International Energy Agency forecasts solar energy to grow faster than any other major renewable source through 2035, driven by at least 40% increase in global electricity demand, according to its latest outlook.
Chinese solar and wind stocks, including Wuxi Autowell Technology Co., rank among this year’s top gainers, supported in part by a broader rebound in mainland equities. In the US, lithium stocks are also surging and Bloom Energy Corp., a fuel cell systems maker, has soared about 24% after nearly quadrupling its share price last year.
Clean energy is a “rates and valuation play,” given that borrowing costs are coming down for the spending-heavy industries, according to Charu Chanana, chief investment strategist at Saxo Markets.
“The outperformance can extend if bond yields keep cooperating and the power and grid investment cycle stays in focus,” she said on Thursday. “But it’s not a straight line — clean energy remains a high-volatility trade.”
For oil, “declining rates, capex discipline and geopolitics mean supply tightness can reappear faster than investors expect,” she added.
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