It has been less than two weeks since Hurricane Helene caused unthinkable damage to the Southeast United States. Now, another storm is barreling down on the West Coast of Florida.
Hurricane Milton has become a Category 5 storm. It’s expected to make landfall Wednesday in the Tampa Bay area.
In May, the National Oceanic and Atmospheric Administration reported that the 2024 hurricane season had an 85% chance of “above-normal conditions.” But hurricanes aren’t the only extreme weather event that has been on the rise in the last couple decades…
Severe temperatures (both hot and cold), blizzards, tornados, droughts, and more have increasingly wreaked havoc on the U.S. as well as countries abroad. These extreme weather patterns have led to the destruction of millions of homes and an unthinkable loss of life.
And it’s showing us dangerous signs of aging in our dilapidated electrical grid.
An upgrade to our electrical grid is well beyond its time. The surge in electricity demand that I’ve talked about in recent months combined with these extreme weather events and an aging grid is a recipe for disaster.
This is where the “Electrification of Everything” megatrend comes in.
It’s the shift from fossil fuels to electric technologies, and it has been around for years. In fact, it’s one of my favorite long-term investing opportunities.
That’s why I launched a new portfolio in The McCall Letter last Friday that specifically targets profiting from this theme. In it is a brand-new stock recommendation that’s a leader in its niche industry and could be a big winner in the years ahead.
The stock is still buyable at current prices. If you’re not yet a subscriber to The McCall Letter and you’re interested in learning more about the Electrification of Everything trend, I encourage you to click here now.
Now, an electrical grid upgrade isn’t only important in the United States. Countries abroad are also in need of a grid overhaul. A lot needs to be done in the coming years – and that creates an investment opportunity that we can’t ignore.
According to BloombergNEF, as much as $21 trillion could be required to upgrade the global electrical grid by 2050. The research firm believes the global cable network needs to reach 152 million kilometers – about the distance between the Earth and the sun.
When trillions of dollars are being pumped into a trend, you better believe there will be some big winners. The key is knowing where to look.
Consider the chart below. It highlights a few companies that have outperformed the S&P 500 over the last three years and are involved in the Electrification of Everything trend.
All of these stocks have steadily climbed higher over the last year and a half. And they’re not the only ones…
Generator manufacturer Generac (GNRC) has been on the move this week – rallying to a 52-week high on Monday as Hurricane Milton closes in on Florida. As you can see below, the last year has been good to Generac investors. But the stock has struggled over the longer term.
I hate to say it, but the extreme weather we’ve seen recently is likely to stick around. So as long-term investors, we must consider the ramifications of heightened extreme weather, an aging electrical grid in the U.S. and Europe, the increasing demand for electricity from artificial intelligence (AI), and the continued move toward renewable energy.
At the end of the day, all four of these trends could be worth trillions of dollars as cash pours into the grid upgrades.
Go ahead and Google the age of the U.S. and European electric grids… I bet you’ll be shocked by what you see. It’s time for upgrades, folks. And as long-term investors, we must position ourselves today.
Here’s to the future,
Matt McCallEditor, Market Insights
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