Fusion energy stocks will only gain more attention between now and 2030. The first fusion power plants will likely be operational by that date. There are also many things happening that serve to bring greater attention to the field.
Late last year, scientists successfully conducted a fusion reaction in which more energy was emitted than was put in. That positive energy gain, known as ignition, had evaded researchers since the quest for it began back in the 50s. The box-office success of Oppenheimer reignited interest in the field. Energy costs could plummet, and carbon emissions could fall to zero. That’s the promise of fusion stocks.
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Chevron (NYSE:CVX) is an energy stock, first and foremost. Investors most closely associate the company with oil. However, the company is also a provider of energy in the more general sense of the word, and thus, it may not be surprising that it is dipping its toe into fusion.
In fact, the more you think about it, the more sense it makes. Chevron is exploring alternative energy sources more generally. Big Oil’s best days are behind it. 2022 was an exceptional year, but the trend is clear: Consumers demand cleaner energy and lower carbon emissions. If Chevron aims to remain relevant, it has to evolve with the times.
Part of that evolution includes investing in fusion, which is precisely what the firm did when it contributed to a $250 million investment in TAE Technologies. Chevron is a steady investment even as the end of oil draws nearer. The company is flush with cash following a monumental 2022 fiscal year. It provides exposure to fusion and nice income in the meantime.
Cenovus Energy (CVE)
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Cenovus Energy (NYSE:CVE) is subject to similar threats facing Chevron. Both stocks are bolstered by oil and natural gas revenues, though the former calls Canada home and the latter, the U.S. That means they each have to strategize for similar expected outcomes: Waning oil demand and a transition plan for the future.
Cenovus Energy is investing in General Fusion, a nuclear fusion technology firm native to Canada. In fact, Cenovus Energy has been investing in General Fusion for a long time. Investing in fusion is going to require patience. That’s as true for investors as it is for Cenovus Energy.
The return on fusion will be large, but it will also require time, as evidenced by commercialization expectations. In the meantime, Cenovus Energy is well regarded on Wall Street, provides modest income, and is exposed to a leading name in the fusion space. It’s worth paying attention to for all of those reasons.
Alphabet (GOOG, GOOGL)
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It probably won’t come as a big surprise that Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) stock provides exposure to the opportunity in fusion. Alphabet is much more than Google, remember. Alphabet’s ‘other bets’ group of businesses represents a wide range of future growth areas after all. Waymo, Verily, and a host of ‘others’ all have the potential to grow into a part of something much bigger.
It’s probably not surprising then that Alphabet also participated in that $250 million investment in TAE Technologies last year. Alphabet is so much more than Google search, cloud, YouTube, and ad revenue. It uses its success in those businesses to fund its future.
Alphabet is also working alongside Microsoft (NASDAQ:MSFT) to create an algorithm that will decrease the time it takes to model plasma, a core of fusion energy. It should be clear to investors that the large, well-funded firms of today have a great chance to fund the fusion leaders of tomorrow. Unknown champions will emerge in time, but for now, it’s clear where the opportunity is.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Alex Sirois is a freelance contributor to InvestorPlace whose personal stock investing style is focused on long-term, buy-and-hold, wealth-building stock picks. Having worked in several industries from e-commerce to translation to education and utilizing his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.
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