In this article, we explore the 11 Best Alternative Energy Stocks to Invest In According to Analysts.

The alternative energy sector entered 2026 with high optimism after enjoying a great run in 2025. Last year, the International Energy Agency (IEA) in its tenth edition of the World Energy Investment report, had predicted that global energy investment would reach $3.3 trillion. The lion’s share of the capital flow, at least $2.2 trillion, would go to clean technologies, the report detailed. Fast forward to 2026, a BloombergNEF analysis put the standalone energy transition investment figure at a record $2.3 trillion in 2025, up 8% from 2024. Electric transport, renewable power, and grid infrastructure led the surge, noted BloombergNEF in its annual Energy Transition Investment Trends (ETIT) report published on January 26.

According to Morningstar, this capital flow momentum happened when the sector was experiencing substantial repricing. Valerio Baselli, Morningstar’s Senior International Editor, wrote on January 26 that alternative energy stocks “staged a sharp comeback in 2025,” and outpaced global equities as financing conditions eased and electricity demand inflected. Baselli pointed to the Morningstar Global Renewable Energy Index which posted a 10% annual gain in 2025, besting the Morningstar Global TME Index’s 8% return. The index was up 7.74% year to date at writing, as of February 18, 2026, but the S&P 500 was down 0.03%.

Xavier Chollet, manager of Pictet’s Clean Energy Transition Fund, identified a structural shift in electricity demand as the strongest wind in the alternative energy sector’s back, especially in the United States. “We estimate that US electricity demand growth will at least quadruple,” he told Morningstar, “driven by AI data centers, the electrification of the economy and the reshoring of energy-intensive manufacturing such as semiconductors, batteries and electric vehicles.”

Nonetheless, the sector still has to surmount several headwinds. This is why, according to some expert observers, investors still demand a valuation discount and why performance is highly selective by sub-segment. Morningstar’s Baselli, for instance, noted that clean energy stocks are acutely sensitive to interest rates and policy shifts. Infrastructure constraints are also a huge issue. For instance, the US interconnection queue has swollen to 2,600 gigawatts with median wait times approaching five years. At the same time, permitting delays and grid bottlenecks create what Robeco’s Roman Boner calls the primary risk that “the energy transition, AI acceleration and electrification are moving faster than grids and regulatory frameworks can handle.”

Against this backdrop, this article identifies 11 alternative energy stocks that analysts believe can ride the headwinds and deliver good returns.

Our Methodology

To compile this list, we utilized various ETFs, including the ProShares S&P Kensho Cleantech ETF and Invesco WilderHill Clean Energy ETF, among others, to scan for alternative energy companies that are popular among elite hedge funds. For the hedge fund holding data, we used the Insider Monkey database for Q3 2025 13F filings. We then focused on stocks with upside potential of at least 20% as of February 17, 2026. The final list is presented in ascending order based on upside.

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 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).

Best Alternative Energy Stocks to Invest In According to Analysts

11. First Solar Inc. (NASDAQ:FSLR)

Stock Upside: 26.39%

Number of Hedge Fund Holdings: 67

First Solar Inc. (NASDAQ:FSLR) is one of the best alternative energy stocks to invest in according to analysts. On January 27, TD Cowen shared findings from its solar industry survey which impacted several companies, including First Solar Inc. (NASDAQ:FSLR). TD Cowen noted that the sector reported a stronger-than-expected Q4 2025 and painted a broadly positive outlook for the US residential solar sector in 2026.​

Respondents to the survey pointed to a recovery in residential solar demand, which is being fueled by a shift toward prepaid leases, said TD Cowen. This financing model became popular after the removal of the 25D residential clean energy tax credit.

The investment bank said the survey respondents projected a median residential solar storage attach rate of 60% for 2026. In other words, they expect more than half of new residential solar installations to be paired with a battery storage system. The firm noted that this attach rate projection is constructive for companies with a storage-first strategy, and added that the trend is underpinned by a 100% energy storage tax credit that remains in effect through 2033.

Separately, on January 22, KeyBanc maintained its Underweight rating and $150 price target on First Solar. KeyBanc, the corporate and investment banking arm of KeyCorp, cited concerns about what the firm described as a complex backdrop for the solar industry.​

The firm pointed to First Solar’s year-to-date underperformance as part of its reasoning. It noted that the stock had declined 6.7% since the start of the year, compared with an 8.6% gain in the NEX Clean Energy Index over the same period. KeyBanc’s analysis focused on potential implications of upcoming regulatory changes for the solar industry, which it said underpins its bearish stance on the company.

First Solar Inc. (NASDAQ:FSLR) is a solar technology company headquartered in Tempe, Arizona. It manufactures thin-film cadmium telluride photovoltaic modules and provides utility-scale solar power plant development and related services.

10. FuelCell Energy Inc. (NASDAQ:FCEL)

Stock Upside: 26.58%

Number of Hedge Fund Holdings: 15

FuelCell Energy Inc. (NASDAQ:FCEL) is one of the best alternative energy stocks to invest in according to analysts. As of February 18, FuelCell Energy Inc. (NASDAQ:FCEL) carries a consensus Hold rating with a $9.33 average target, implying 26.58% upside potential.

On January 20, FuelCell and Sustainable Development Capital LLP (SDCL) announced a partnership to deploy up to 450 megawatts of advanced fuel-cell power systems at data centers and other mission-critical facilities worldwide.

The companies signed a letter of intent (LOI) that detailed the plan to combine FuelCell Energy’s power generation technology with SDCL’s expertise in financing and operating large-scale energy infrastructure. This partnership is a direct response to the explosive growth of AI and high-performance computing, the LOI stated.

According to FuelCell CEO Jason Few, “As AI and high-performance computing scale, power is no longer just about more capacity; it’s about a different architecture.” In other words, the executive believes AI-era data centers need more power and that they also need a completely different way of getting it.

For SDCL CEO Jonathan Maxwell, their interest is in “energy efficient infrastructure that delivers long-term value.” That way, they will be part of the core support system for the evolution to a cleaner energy system. “FuelCell’s technology aligns well with that vision, offering reliable, high-availability power with significantly lower emissions,” Maxwell said.

FuelCell Energy Inc. (NASDAQ:FCEL) is a fuel cell technology company headquartered in Danbury, Connecticut. It designs, manufactures, operates, and services power plants based on molten carbonate fuel cells. The company’s products include fuel cell systems for baseload power, combined heat and power, microgrids, biogas utilization, carbon capture, and hydrogen production through electrolysis.