This Beaten Down LED Stock Could Run on Biden’s New Energy Efficiency Rules

Light-emitting diode (LED) stocks could be a bright investment idea.

CNBC reports that earlier this week, the Biden administration “announced new energy efficiency regulations that will phase out old-fashioned incandescent lightbulbs, a move that will drive down electricity use and curb greenhouse gas emissions from the country’s power sector.”

The new rule will ban the sale of light bulbs that produce less than 45 lumens per watt, and could save consumers about $3 billion a year in energy costs. It could also help prevent 222 million tons of carbon pollution over the next 30 years.

3 LED light bulbs with gradient color background

“LEDs have become so inexpensive that there’s no good reason for manufacturers to keep selling 19th-century technology that just isn’t very good at turning electrical energy into light,” Steven Nadel, executive director of the American Council for an Energy-Efficient Economy, said. “These standards will finally phase out energy-wasting bulbs across the country.”

Better, the LED market could rocket from $52 billion to more than $112 billion by 2024.

Also, as Mordor Intelligence notes, “There is a growing need for energy saving across the world, which is creating scope for the market. It is expected that the transition to energy-efficient lighting would reduce the global electricity demand for lighting by 30-40% in 2030.”

So, how should we invest?

One direction is to consider investing in the ALPS Clean Energy ETF (ACES). With an expense ratio of 0.55%, the ETF invests in solar, wind, energy management and storage, bioenergy, hydropower, electric vehicles, and hydrogen to name a few. Some of its top holdings include Tesla, First Solar, Enphase Energy, Northland Power, and Sunrun.

Or, you can look into LED stocks, such as Veeco Instruments (VECO), whose process equipment solutions enable the manufacture of LEDs and power electronics. Oversold at support dating back to November 2021, we’d like to see VECO race from $22.55 back to at least $29, in the near term. It’s also aggressively oversold on RSI, MACD, and W%R. With VECO, weakness may be an opportunity.