As Trump Backs 'Drill Baby, Drill,' His DOGE Co-Lead Elon Musk Believes 'All Energy Generation Will Be Solar' — Here's What UBS Recommends After Election Dip

Renewable energy stocks present a buying opportunity despite recent electoral headwinds, according to UBS analysts, while Tesla Inc. TSLA CEO Elon Musk continues to advocate solar power’s future dominance.

What Happened: UBS analysts on Thursday elevated U.S. and EU renewables to their top-ranking stock theme, citing an attractive entry point following steep post-election losses, reported Business Insider.

The announcement comes as clean energy shares have tumbled, with companies like Plug Power Inc. PLUG and Enphase Energy Inc. ENPH down over 24% since President-elect Donald Trump‘s victory.

“The environment of an unrelenting power demand shock puts just about every source of power generation in a solid position to capitalize,” UBS analysts wrote, pointing to surging power needs from artificial intelligence data centers and corporate sustainability goals.

The analysts remain optimistic despite Trump’s expected scaling back of President Joe Biden-era clean energy initiatives. They argue that companies could “grandfather” existing subsidies and that state-level emission goals will sustain industry growth.

See Also: Jim Cramer Doubles Down On Nvidia: ‘Demand Is Accelerating’ As AI Customers ‘Have No Choice’ But To Buy Its Chips

This view comes as Trump, who has appointed Musk and Vivek Ramaswamy to co-lead his new Department of Government Efficiency named after cryptocurrency Dogecoin, advocates for increased drilling.

Musk, despite his new role in the incoming Trump administration, has historically remained bullish on renewable energy. “Once you understand Kardashev Scale, it becomes utterly obvious that essentially all energy generation will be solar,” he posted on X. He noted that a single square mile receives approximately 2.5 gigawatts of solar energy.

Once you understand Kardashev Scale, it becomes utterly obvious that essentially all energy generation will be solar.

Also, just do the math on solar on Earth and you soon figure out that a relatively small corner of Texas or New Mexico can easily serve all US electricity.

— Elon Musk (@elonmusk) September 26, 2024

UBS recommends several stocks poised for gains, including NextEra Energy Inc. NEE and Generac Holdings Inc. GNRC in the U.S., along with European players like Iberdrola IBDRY, Siemens Energy SMEGF, and Orsted DOGEF. The analysts cite historical precedent, noting that solar installations grew 50% during Trump’s previous term.

The renewable sector’s growth potential is further supported by expanding applications, including Musk’s recent suggestion that SpaceX’s Starlink satellite network could integrate solar panels and batteries into its hardware offering.

While Trump’s “drill baby, drill” stance has rattled markets, UBS maintains that investor concerns about the sector’s future may be “overdone,” as corporate and state-level commitments to clean energy persist alongside growing power demands from emerging technologies.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.