In this article, we will discuss: 10 Best Geothermal Stocks to Buy According to Hedge Funds.
Geothermal stocks are companies that use heat from the earth to generate electricity, heating, and cooling. This comprises companies in geothermal energy production, exploration, and technology development.
The geothermal market is growing rapidly. On April 2, 2025, Dandelion Energy, a prominent private company specializing in home geothermal heating and cooling, announced a partnership with one of the nation’s largest homebuilders to integrate geothermal systems into over 1,500 new homes in Colorado over the following two years. The program’s goal, which is among the biggest residential geothermal deployments in American history, is to standardize geothermal heating and cooling in new construction. When compared to air-source heat pumps, homeowners may anticipate saving almost $30 million over the next 20 years due to lower energy expenditures and better efficiency. According to a recent Department of Energy report, the widespread use of geothermal heat pumps could reduce the need for 24,500 miles of additional grid transmission lines, which is comparable to crossing the United States eight times. Overall, the collaboration highlights a growing trend toward sustainable homebuilding and lower carbon footprints in residential buildings.
Governor of Colorado Jared Polis stated:
“Geothermal energy – the heat beneath our feet – is a clean energy option that will help save Coloradans money and protect our state for future generations. I’m very excited that Dandelion is building on Colorado’s leadership on geothermal by connecting more than 1,500 Colorado homes to low-cost heating and cooling. It’s good for Coloradans, for our air quality, and our economy,”
As we look forward, according to the International Energy Agency’s report, geothermal energy, which now meets less than 1% of worldwide demand, is anticipated to supply up to 15% of global power by 2050, with an anticipated capacity of 800 GW and approximately 6,000 TWh per year. Advancements in drilling technology, comprising hydraulic fracturing and horizontal drilling, might unlock geothermal resources at depths greater than 3 km, hence extending the global potential. In 2023, more than 75% of global geothermal capacity was utilized, greatly outperforming wind (30%) and solar (15%) in terms of capacity factor. Investment in geothermal energy could surpass $1 trillion by 2035 due to decreased costs and oil and gas sector expertise. Government support may reduce prices by 80% by 2035, putting geothermal on equal ground with solar and wind. There are still major obstacles to overcome, such as the lack of qualified workers, environmental effects, and delays in obtaining permits. The success of geothermal energy depends on governments streamlining procedures, offering incentives, and encouraging research to fulfill the world’s expanding demand for electricity.
As per Deloitte’s report, rapidly maturing Enhanced geothermal systems (EGS) capable of providing 24/7 baseload electricity by accessing deep heat reservoirs are benefiting from federal funding and cross-sector investment in technological advances such as new drilling techniques and extreme heat operations, as well as bipartisan support to accelerate projects. Technology companies are collaborating with developers to produce geothermal electricity, as well as with utilities to facilitate EGS deployments by offering a clean transition tariff to cover the costs and risks of implementing a new technology. Meanwhile, a utility inked the largest geothermal power purchase agreement, reaching 320 MW, to meet a public utility commission’s need to obtain carbon-free power 24 hours a day, seven days a week.
With that said, here are the 10 Best Geothermal Stocks to Buy According to Hedge Funds.
A drilling rig in the desert with an orange sunset in the background.
Our Methodology
We sifted through online rankings to form an initial list of 10 Geothermal stocks. From the resultant dataset, we chose the top 9 stocks most favored by hedge funds, using Insider Monkey’s database of 1,009 hedge funds in Q4 2024 to gauge hedge fund sentiment for stocks. We have also included a pure-play private geothermal company and ranked it 10th on our list.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10. Calpine Corporation
Calpine Corporation, located in Houston, Texas, is a prominent player in the geothermal energy as well as the US natural gas industry. Its operational portfolio of 79 energy facilities totals more than 27,000 megawatts of generation capacity. Through wholesale power operations and its retail businesses, the company serves customers in 22 states and Canada.
Calpine maintains The Geysers, the world’s largest complex of geothermal energy facilities. About half of California’s in-state geothermal power comes from dry or superheated steam at The Geysers. The Geysers have the current capacity to generate 725 megawatts of electricity around the clock, which is enough to power 725,000 homes. It utilizes about 13 million gallons of reclaimed city water each day, reducing the need to release this water into local waterways, resulting in another distinctive environmental win.
On January 10, 2025, Constellation Energy Corporation and Calpine announced the final agreement to acquire Calpine for a total of around $16.4 billion. The transaction includes 50 million Constellation shares, $4.5 billion in cash, and the assumption of approximately $12.7 billion in the company’s net debt. After taking into account the cash that the business is anticipated to bring in between signing and the estimated close date, as well as the value of Calpine’s tax attributes, the net purchase price is $26.6 billion, representing an appealing acquisition multiple of 7.9x 2026 EV/EBITDA.
9. Ormat Technologies, Inc. (NYSE:ORA)
Number of Hedge Fund Investors: 28
One of the Best Geothermal Stocks, Ormat Technologies, Inc. (NYSE:ORA) operates in the geothermal and recovered energy power markets. It excercises three business segments. The Electricity Segment is where the firm develops, builds, owns, and operates geothermal, solar PV, and recovered energy-based power facilities in the United States, as well as geothermal power plants in other countries, and sells the electricity they create. The product segment involves developing, manufacturing, and selling geothermal and recovered energy-based electricity production equipment, along with offering engineering, procurement, and construction services for geothermal and recovered energy-based power plants. The Energy Storage Segment comprises owning and operating grid-connected assets that supply capacity, energy, and ancillary services directly to the electric grid.
Ormat Technologies, Inc. (NYSE:ORA)’s financial performance in 2024 was solid, with a 6.1% jump in revenue and 14.3% growth in adjusted EBITDA, primarily due to improvements across all business segments. The acquisition of Enel assets raised revenue and EBITDA, whereas new PPA agreements for the Boyan, Hebe 1, and Mammoth 2 power facilities showed substantial demand for geothermal energy. The Product segment backlog surpassed $340 million, boosted by significant deals in New Zealand and Dominica. The firm also extended its energy storage division by bringing three new facilities online, including its largest project, Bozident, resulting in 56.7% revenue growth in the fourth quarter of 2024 and a 30.6% increase for the year.
In 2024, Ormat Technologies, Inc. (NYSE:ORA) purchased 1,678 acres of land in Utah in a Bureau of Land Management auction. The new site will allow the company to develop two more geothermal power units at its Cove Fort facility. The first plant’s (Cove Fort 2) exploration will begin this year, with commercial operations expected to begin in 2027. The second facility, named Cove Fort North, will be built later.
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