Are Clean Tech Stocks Really On The Rise? Or Are Bubbles Artificially Boosting Valuations?

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Clean tech stocks have seen a recent upsurge. Investors are smiling at the rebound after a relatively long period of disappointing returns. What’s happening to make green investors so happy?

Well, renewable energy is expanding faster than fossil fuels around the world, despite policy changes in the US. Oil demand could peak around 2030, states the International Energy Agency. (US Energy Secretary Chris Wright threatened in July to pull out of the IEA if it did not reform how it operates, aka projecting dwindling demand for fossil fuels).

On one hand, the S&P Global Clean Energy Index lists clean energy up nearly 54% this year. Globally, renewable power capacity is projected to increase almost 4600 GW between 2025 and 2030 — double the deployment of the previous five years (2019–2024).

On the other hand, the upswing makes little sense, with President Donald Trump thumbing his nose at anything that distantly smells of renewables. Wind, solar, electric vehicles? Don’t let the door hit you on the way out, Trump intimates.

There are subtexts that should also be included in this discussion.

The data centers needed to make artificial intelligence (AI) possible are voracious consumers of electricity. An analysis by the US Department of Energy suggests the power needed to run them could amount to 12% of America’s total electrical demand within a few years.

In the push for more clean energy deployments, are too many regulatory shortcuts being taken? Regulations are designed to protect citizens from innovations that aren’t fully researched and tested on-the-ground. Naysayers are shouting from social media rooftops that regulations are nothing more than onerous barriers to future clean tech innovation.

Meanwhile, Planet Earth won’t get the relief it needs to hit the critical temperature threshold of 1.5°C, and it seems evident that 2°C is out of reach, too, with so many fossil fuel projects expanding instead of contracting.

The Sound of Science

An October 2025 issue of The Economist argues that, “Brick by brick, President Donald Trump is building a wall around the world’s largest economy.” Yet investors have “swung from panic to euphoria.”

One of the reasons for the enthusiasm for clean energy stocks is that the US is witnessing a stock market boom fueled by optimism connected to energy needed to power data centers and their artificial intelligence (AI) capacities. McKinsey, for example, spent $5.2 trillion on the chips, data centers, and energy to produce AI. Electricity demand tied to AI is on track to quadruple within a decade, with renewables and fossil fuels continuing to power demands, according to BloombergNEF.

Can that confidence in AI be sustained, or will it be fleeting, as “the higher it soars, the greater the danger of a crash, putting the wealth effect into reverse?” The strength of demand for generative AI may become its most influential factor for success or failure. Remote locations for centers, non-public financing, and weak credit for some borrowers each cast a dark shadow over AI’s full potential, but the lack of surplus energy for training the latest large language models (LLMs) is introducing risks for property investors. Utilities may have qualms about signing long-term contracts with new AI firms, even with insurance policies in place to mitigate risks.

Then again, Sam Altman, OpenAI exec, suggests that the risks of underbuilding AI centers are at least as serious as those of overbuilding because of the long-term economic potential of generative AI.

Throw Regulations from the Train

One offshoot of the AI transformation is robotaxi technology, and a recent study finds Waymo has 88% fewer property-damage claims and 92% fewer injury claims than humans. Nonetheless, the challenge of making robotaxis commercially viable remains. Some experts say that regulatory roadblocks inhibit firms from expanding their operations, improving their technology, and bringing down costs — which slows another of the innovative clean tech stocks from their full potential.

Stories about government regulations and efforts to dismantle them fill the news. Indeed, regulations are on the minds of many business industry leaders. Peter Thiel, co-founder of Palantir, bemoans “peace and safety” and these tendencies to dampen technology’s potential.

China, on the other hand, while pushing to dominate the world’s new technologies, has given automakers lots of space to innovate but also requires all Level 2 driver-assistance systems to disengage if they detect that the driver has become disengaged.

Regulation weakness also became clear in Spain. It’s a country in which wind and solar now account for more than 40% of the total electricity supply. However, in April a voltage surge at a solar plant prompted the entire grid to shut down abruptly. The blackout exposed both technical and regulatory failures. Last month the state-owned company that both owns the grid and manages the whole Iberian system reported more voltage fluctuations and said it needed permission to change its operating procedures.

Partially, that’s because electricity supply has grown much faster than demand. Moreover, solar power has not seen sufficient investment in storage and stabilization technologies, such as batteries.

Nature-Based Clean Tech Stock Need to be Protected

There’s another option for clean tech success; it’s called nature-based solutions. IPCC scientists argue that, alongside tech applications to reduce emissions, we should be harnessing the carbon-sequestering powers of the planet itself. Nature-based solutions — efforts like reforestation and ecosystem restoration — pay for themselves with a triple dividend, as they sequester carbon, boost biodiversity, and aid in human well-being.

Conversely, as Nicole Miller writes in Green Money, “From technology companies relying on rare earth minerals to agricultural giants dependent on healthy soil and pollinators, every sector faces nature-related risks.”

If the Amazon rainforest were considered an economic asset, valued for its carbon storage, water regulation, and biodiversity as services rendered, rather than freebies, its preservation would be reconstructed as economically valuable. The region needs an economic model that can both protect the first and deliver prosperity to the people who live there. How to do so is a big question that’s being posed at COP30.

The World Resources Institute (WRI) calculates that the area of land controlled by indigenous people in Brazil grew from less than 1% of Brazil’s land in 1985 to almost 13% today. The next step is to allow the people who live there the right to control the natural assets — the billions of carbon storage tons, the regulation of vast bodies of water, and the repository of biodiverse species that exist nowhere else on Earth. it’s a different kind of deregulation — one that endows indigenous  Brazilians with the power to protect their precious land as the ancients have done for millennia.