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Investors in Invesco WilderHill Clean Energy ETF (NYSEARCA:PBW) have watched shares climb 74% over the past year, rising from around $20 to $35. This recovery reflects renewed optimism about renewable energy economics, though the fund still trades well below its 2021 peak after a brutal 70% drawdown driven by rising rates and profitability concerns.
The AI Data Center Boom Changes the Equation
Clean energy’s investment case traditionally hinged on policy support and cost competitiveness with fossil fuels. That changed in 2025 when artificial intelligence infrastructure created urgent new demand for reliable, on-site power generation. The shift became visible when companies like Bloom Energy (NYSE:BE) secured data center contracts that validated fuel cells as immediate power solutions, driving investor enthusiasm for on-site generation technologies. This wasn’t about tax credits or renewable mandates. It was about tech companies needing power immediately, in massive quantities, without waiting for grid upgrades.
The macro factor to watch is whether AI buildout sustains this demand trajectory. Data center energy consumption is projected to double by 2028, and renewable providers are positioned as the fastest path to new capacity. But if AI investment slows or if utilities accelerate natural gas plant construction, the urgency fades. Track announcements from hyperscalers like Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOGL), and Amazon (NASDAQ:AMZN) about their energy procurement plans. These appear in quarterly earnings calls and sustainability reports. A shift from renewable commitments to pragmatic fossil fuel contracts would undermine PBW’s recent momentum.
Lithium Exposure Creates Portfolio Concentration Risk
Lithium exposure illustrates PBW’s commodity risk. The fund’s positions in companies like Albemarle (NYSE:ALB) looked prescient when lithium commanded $80,000 per ton, but the subsequent price collapse below $12,000 turned these holdings into portfolio anchors. This pattern repeats across the portfolio – the fund’s top holding, Navitas Semiconductor (NASDAQ:NVTS), saw revenue fall by more than half despite its positioning in AI infrastructure power semiconductors, revealing a disconnect between thematic appeal and actual business performance.
The micro factor is holdings-level execution risk. Check the ETF’s monthly fact sheet on Invesco’s website to monitor whether lithium and semiconductor positions are expanding or contracting. If the fund rebalances toward companies with actual revenue growth rather than thematic exposure, that signals healthier fundamentals. Conversely, continued concentration in unprofitable battery material plays suggests speculative positioning vulnerable to commodity price swings.
The next 12 months hinge on whether AI energy demand proves durable and whether PBW’s lithium-heavy portfolio can deliver earnings growth, not just thematic appeal.