We recently compiled a list of 6 Best Geothermal Stocks To Invest In. In this article, we will have a look at where Weatherford (NASDAQ:WFRD) ranks on our list of the best geothermal stocks to invest in.
Geothermal Energy
Geothermal energy is a type of renewable energy source derived from the continuous heat generated within the Earth. This heat is produced by the slow decay of radioactive particles in the Earth’s core and can be used for various applications such as generating electricity and heating. Unlike other renewable energy sources such as wind and solar, geothermal energy is stable and offers a constant and reliable supply of power, regardless of weather conditions or time of day. Additionally, geothermal plants have a smaller land footprint compared to wind farms and solar panels, making them a more efficient choice for regions with high geothermal activity.
According to a report by Fortune Business Insights, the global geothermal energy market was valued at $70.14 billion in 2024 and is expected to grow from to $117.02 billion by 2032, with a CAGR of 6.61%. The Asia-Pacific region leads the geothermal industry and holds a market share of 37.14%. In the U.S., the focus is on maximizing renewable electricity output, particularly through Geothermal District Heating (GDH) systems. According to the GeoVision report, the U.S. has the potential to establish 17,500 GDH systems by 2050. Currently, only 23 systems are operational nationwide.
One of the key hurdles for geothermal development has been the high cost and risk of drilling and finding viable resources, companies are overcoming these challenges with innovative drilling techniques. These advancements enable the creation of geothermal wells without depending on a site’s natural permeability. Companies are also making drilling wells more cost-effective and sustainable by using a proprietary thermally conductive material and recycling water through a closed-loop system, which can extend the lifespan of its wells to over 30 years, making the technology attractive for long-term energy production.
Geothermal Energy Market Set for Growth
After years of slow development, geothermal energy is gaining serious momentum and investors are increasingly bullish on geothermal due to technological breakthroughs. Andrew Beebe, Managing Director at Obvious Ventures, believes the innovations now being developed will make geothermal energy more predictable, cost-effective, and scalable. As new technologies make geothermal wells more efficient, scalable, and cost-effective, the sector is poised for rapid growth, offering a unique opportunity for forward-thinking investors. Geothermal startups are proving that, with the right innovations, the industry can evolve and meet the world’s growing energy needs. The recent influx of capital is just the beginning, as investors see significant potential in a sector that has long been underutilized.
In the last six months alone, at least six geothermal startups have successfully closed funding rounds, one of the latest companies to benefit from this investment wave is XGS Energy, which announced an additional $20 million in Series A financing. The company’s closed-loop system for reusing water in injection wells is a key innovation, designed to make geothermal energy more efficient and scalable. This is part of a broader trend, with companies like Zanskar Geothermal & Minerals raising $30 million in Series B funding for AI-powered geothermal exploration, and Fervo Energy securing $244 million in Series D financing. The U.S. Department of Energy estimates that geothermal could provide 8.5% of the country’s electricity by 2050.
Geothermal’s ability to provide consistent power, combined with a smaller environmental footprint, makes it an attractive alternative to other renewable options. The U.S. has vast untapped potential in areas like Geothermal District Heating, with increased investment and innovation, the geothermal industry is well-positioned to contribute to the world’s renewable energy goals. With that in context let’s take a look at the 6 best geothermal stocks to invest in.
Our Methodology
For this article, we used green energy ETFs plus online rankings to compile an initial list of 15 geothermal stocks. From that list, we shortlisted companies according to their hedge fund sentiment, which was taken from our database of 912 elite hedge funds as of Q2 of 2024. Here is the list of 6 best geothermal stocks to invest in sorted in ascending order of their number of hedge funds as of Q2.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A team of engineers in hardhats drilling for oil, clouds of smoke in the air.
Weatherford (NASDAQ:WFRD)
Number of Hedge Fund Investors in Q2 2024: 43
Weatherford (NASDAQ:WFRD) is a major player in the oilfield services industry and focuses on providing equipment and services for drilling, evaluation, completion, production, and intervention in oil and natural gas wells. The company operates in approximately 75 countries and has around 18,500 employees worldwide. Weatherford (NASDAQ:WFRD) also provides comprehensive geothermal energy solutions, offers heat-resistant technologies for both new and existing wells, and optimizes operations with real-time data, digitalization, and automation.
Weatherford (NASDAQ:WFRD) has achieved notable success in the geothermal energy sector through its advanced technologies. One of the standout technologies is its competitive liner systems. These systems are engineered to perform in some of the harshest environments, including ultradeep, high-angle, and extended-reach wellbores. Weatherford’s (NASDAQ:WFRD) Drilling-with-Liner (DwL) approach combines drilling and casing simultaneously in a single operation, which is highly advantageous in geothermal drilling as it reduces drilling time and significantly lowers overall costs. The technology also enhances wellbore stability by immediately reinforcing the well with the liner, which is especially crucial in geothermal environments where high temperatures and pressures present significant challenges.
Analysts expect Weatherford (NASDAQ:WFRD) to increase its earnings by 24% this year and have a consensus Buy rating on the stock, with an average price target of $152.25 which indicates a potential almost 50% upside from current levels. As of the second quarter, the company’s stock is held by 43 hedge funds, with a total stake valued at $705.67 million. Renaissance Technologies is the largest shareholder in the company and owns shares worth $80.56 million as of June 30.
Overall WFRD ranks 3rd on our list of the best geothermal stocks to invest in. While we acknowledge the potential of WFRD as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than WFRD but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure. None. This article was originally published on Insider Monkey.