The fundamentals really don’t justify the boom.

However, not every investor believes the green stock surge is sustainable. Some are concerned that it’s overly dependent on AI, where bubble fears continue to linger. From Bloomberg:

Renaud Saleur, founder and chief executive of Anaconda Invest, a Geneva-based boutique hedge fund that specializes in the energy sector, says some of the stocks that have outperformed are “not really the quality ones.”

He also questions whether the insatiable energy needs of the data centers powering AI can ever be met. “The extra demand for AI is impossible to fuel,” Saleur says. The end game will be “a lot of disappointment.”

Tim Bachmann, a climate-tech portfolio manager at the fund management unit of Deutsche Bank AG, DWS, says investors should be prepared for another “Deepseek moment,” referring to the Chinese startup that stunned the world earlier this year after it unveiled a low-cost, energy efficient version of AI.

Bjorn Lomborg has also weighed in on green stock returns.

Typically green stocks have lagged behind the larger market and, in this instance, they’re being elevated in hopes of renewables being able to power AI power centers which won’t happen. Somehow China is likely propping these stocks up in hopes of blunting the U.S.’s returning to fossil fuels.

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