Redefining Energy 166. Green Equities Performance: Core vs Periphery - Jan 2025
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Jan 13, 2025 Shanu Mathew, Senior Vice President at Lazard Asset Management and an expert in sustainable equities, dives into the contrasting performances of clean tech sectors in 2024. He highlights a 20% drop in 'Core' Cleantech versus the remarkable success of 'Periphery' companies like Siemens Energy. Shanu discusses the underlying fundamentals of this divergence, including interest rates and political uncertainties. He also sheds light on the electricity demand surge driven by AI and datacenters, and predicts a potential positive rebalancing for Core Cleantech in 2025.
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Cleantech vs. Adjacent Cleantech Performance
- Cleantech stocks underperformed significantly in 2024, while cleantech-adjacent stocks thrived.
- Traditional cleantech indices dropped 20-30%, while adjacent sectors like electrical equipment and HVAC saw strong growth.
Competitive Advantages in Adjacent Cleantech
- Cleantech-adjacent companies possess stronger competitive advantages, or "moats."
- Established brands, oligopolistic structures, and better pricing power contribute to their resilience.
Load Growth and Data Centers
- Growing electricity demand, driven by data centers and AI, is a key investment theme.
- Data center growth presents a massive opportunity, but actual load growth needs to materialize.