Hey Insiders, The Inflation Reduction Act, the largest climate spending package in U.S. history, is headed to President Biden's desk for his signature after it passed the House and Senate. It will provide tremendous benefits to many sectors. I've researched the bill and found that it will have the most significant impact on the following sectors: - Solar
- Wind & Nuclear
- Hydrogen & Energy Storage
- Electric Vehicles
- Lithium Batteries
- Oil & Gas
- Health Care
In today's newsletter, I will briefly explain how each of these sectors will benefit from the bill and provide a short list of companies that will benefit from the trend in that market. Before jumping in, I wanted to mention that the bill also establishes a floor on corporate taxes and institutes a new 1% tax on stock buybacks. This means many of the picks from last week's newsletter will be negatively impacted. As always, I highly encourage you to reach out on Twitter if you have suggestions, comments, or questions. Onward and Upward, |
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Trend to Watch: Solar The bill has $60B in incentives for domestic manufacturing of clean energy solutions. This is not specific to solar, but solar will benefit. What is specific to solar, however, is the extension of the Solar Investment Tax Credit, which was a significant catalyst in the growth of the solar industry in the U.S. This credit gives commercial and residential consumers a 26% tax credit on purchasing solar systems, and under the new bill, it will increase to 30% for the next 10 years. Stocks to watch in this industry include: - Sunrun (NASDAQ: RUN)
- Sunnova (NYSE: NOVA)
- SunPower (NASDAQ: SPWR)
- First Solar (NASDAQ: FSLR)
- Enphase Energy (NASDAQ: ENPH)
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Trend to Watch: Wind & Nuclear As previously mentioned, the $60B in incentives for renewables is not limited to solar power. This means that there is a tremendous opportunity to expand domestic energy production in the Wind and Nuclear industries. There are also specific incentives that are directed at being able to extend the lifespan of existing nuclear facilities, which will support the growth of existing names in the industry. Here are some Wind & Nuclear stocks to consider: - NextEra Energy (NYSE: NEE)
- AES Corporation (NYSE: AES)
- Constellation Energy (NASDAQ: CEG)
- Public Service Enterprise (NYSE: PEG)
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 A message from CAPGEMINI ENGINEERING The Metaverse: A Digital Frontier. In this webinar, Capgemini Engineering and NVIDIA will discuss their partnership to build immersive experiences in the metaverse. We’ll go over an overview: - What is the metaverse? How is it built?
- What are the opportunities/metaverse applications in manufacturing, automotive, consumer products, retail & distribution (CPRD) industries?
- What is NVIDIA Omniverse? Demos of what Omniverse customers are doing today
Partnership discussion: - How the business models of Capgemini Engineering & NVIDIA complement each other
- Values & short-term deliverables of the partnership
You will also learn about NVIDIA’s integrated hardware/software solution and Capgemini Engineering’s role as a services arm and digital asset creator. Presenters: - Walker Sherk, Head of Emerging Technologies at Capgemini Engineering
- Madison Huang, Product Marketing Manager, Omniverse at NVIDIA
- Weihan Wu, Omniverse Partner Ecosystem at NVIDIA
The webinar takes place on August 25, 2022 at 10 AM PT / 1 PM ET. Register Here
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Trend to Watch: Hydrogen and Energy Storage Wolfe Research claims that the production tax credit in the bill will be a "game-changing boost" for the hydrogen industry, which has been drastically underfunded and largely ignored in the U.S. during the recent shift toward renewables and new energy storage sources. Energy storage was surprisingly given stand-alone credits separate from any production or manufacturing incentives, meaning that companies specializing in storage should see a significant boost. Stocks in these industries include: - Plug Power (NASDAQ: PLUG)
- Bloom Energy (NYSE: BE)
- Fluence Energy (NASDAQ: FLNC)
- Stem (NYSE: STEM)
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Trend to Watch: Electric Vehicles Some of the most fundamental objectives of the legislation involve increasing EVs' affordability and helping transition drivers from internal combustion engines to electric vehicles. There are, however, already credits for companies on the first 200,000 electric vehicles they sell. For this reason, a shortlist of companies will benefit from the new credits as they must already be selling electric vehicles en masse. Companies already maxing out their electric vehicle credits that will benefit from the expansion to the program include: - Tesla (NASDAQ: TSLA)
- GM (NYSE: GM)
- Ford (NYSE: F)
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Trend to Watch: Lithium Batteries One of the new requirements for companies that want to take advantage of the new electric vehicle credits is that they must gradually stop purchasing batteries from foreign suppliers and instead source them from either the U.S. or a free trade partner of the U.S. This means that the bill should dramatically increase demand and support for U.S domestic production of lithium batteries. Companies that will benefit include: - Albemarle (NYSE: ALB)
- Lithium Americas (NYSE: LAC)
- Piedmont Lithium (NASDAQ: PLL)
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Trend to Watch: Oil and Gas Morgan Stanley is very high on this bill's positive impact on oil and gas companies. Many legacy companies have invested heavily in carbon capture technology, which is now being rewarded in this bill. Furthermore, there are new rules around lease auctions for oil and gas companies on federal lands to decrease the cost of crude/gas in the short term. Stocks that will benefit include: - Exxon (NYSE: XOM)
- Chevron (NYSE: CVX)
- Occidental (NYSE: OXY)
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Trend to Watch: Healthcare Finally, the bill includes $64B to extend the Affordable Care Act. This will provide a significant boost to the healthcare industry. One downside, however, is that it removed Medicare's restriction on negotiating drug prices. This means the earnings of many pharmaceutical companies will fall as Medicare can negotiate to bulk buy drugs at a lower price. Firms that will be impacted include: - Bristol-Myers (NYSE: BMY)
- Moderna (NASDAQ: MRNA)
- Pfizer (NYSE: PFE)
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NOTE: Inside.com newsletter, event, and website content reflects the opinions of only the authors who are associated persons of Inside.com and do not reflect the views of Inside.com. This content is for informational purposes only, and is not a recommendation of an investment strategy or to buy or sell any security, digital asset (including cryptocurrency) in any account. The content is also not a research report and is not intended to serve as the basis for any investment decision. The content is not legal advice. Any third-party information provided therein does not reflect the views of Inside.com. All investments involve risk including the loss of principal, and past performance does not guarantee future results.
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 |  | Liam Gill is a founder, lawyer and investor.
He previously founded Fumarii Technologies, which became a top 20 ranked cloud computing service (Yahoo Finance! 2019) valued at over $30M. He holds an LLB Laws (UK), MSc Management and Master of Laws and currently practices law at Zargar Lawyers + Business Strategists in Vancouver, Canada.
|   | | Editor | Aaron Crutchfield is based in the high desert of California. Over the last two decades, he has spent time writing and editing at various local newspapers and defense contractors in California. When he's not working, he can often be found looking at the latest memes with his kids or working on his 1962 and 1972 Fords. | |
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