By skyforbes My original post is below, as well as a screenshot of my positions.
Yes. That is the stock I am going to recommend you buy today. At least you know you won't be buying at an ATH.
My positions: 362 shares of ENPH at ~$30 per share. I plan to continue to invest into Enphase over the next few months.
At the time of writing, ENPH is down 60% YTD. However, I expect/hope to see significant upwards price movement over the next year for the following reasons.
- Electricity prices are rising across the US; Enphase products enable residential (and now commercial) customers to generate their own electricity.
- Interest rates are falling. Many customers take out loans to install PV systems; lower interest rates = cheaper loans = more PV systems sold. This pairs nicely with point 1) above.
- ENPH has moved much of their production into the United States, reducing exposure to tariff nonsense.
- The big kicker: Virtual Power Plants (VPPs). The US electricity grid is old AF and unable to handle growing electricity loads. Upgrading the grid is expensive. Virtual Power Plants are basically an interconnected web of end customers who agree that the utility can reduce their electricity use (say, pause or slow down charging on an EV) at times of high electricity demand. Enphase has partnered with Kraken to offer VPPs in Europe. VPPs allow utilities to avoid building expensive new power plants and transmission lines by simply reducing the "peak" amount of energy the utility needs to provide at any given time. VPPs are present in the United States (Enphase already offers support for VPP programs in Colorado) but it seems likely that more states and utilities will look to VPPs to limit the cost of grid investments.
- Speaking of Kraken, it's a name you'll also want to get familiar with. And no, I'm not referring to the Kraken crypto platform, which, confusingly, is also expected to IPO next year. The Kraken I'm referring to is a SaaS company helping utilities modernize their operating systems, including using AI to help manage electricity loads. It's probably one of the most non-regarded AI companies out there, and it is expected to IPO next year and will probably moon. But don't take my word for it, here's a few news articles saying as much:
- The Wall Street Journal, September 18, 2025: Octopus Energy to Spin Off AI Arm Kraken to Create Potential $15 Billion Software Platform.
- The Economist, April 9, 2025: AI models can help generate cleaner power.
- The U.S. Distributed Energy Resource (DER) market (which includes VPPs) is expected to grow significantly over the next five years. Enphase is well-positioned to capitalize on this growth – they're already doing this stuff in Europe.
- On Friday, October 31 (spooky), the CEO bought 10k shares for about $300,000. Maybe it's a smoke screen but it makes me feel better buying at this price point.
- The underlying company actually makes money. I know, it's crazy, but I think that ENPH is one of the few companies with actual positive cash flow that is ALSO tied to a real-world use case of AI (through its VPP product offerings) and ALSO is in an industry segment that could see some real crazy meme stock growth potential soon. Right now, all the attention is on data centers, and lots of stocks tied to the provision of energy to data centers have gone nuts. I think that VPPs have the chance to hop on the same train and Enphase is one of the publicly traded stocks that will benefit from this.
Downside risks: Number 1 is that certain solar tax credits expire at the end of the year. This could really hurt Enphase's numbers early next year, though I hope this will be offset by higher electricity prices and lower interest rates. We'll probably have a better understanding of the realized impact after Q1 earnings in the spring. Number 2 is that Tesla just eats the entire VPP market, which is a possibility. Number 3 is that the VPPs don't really become a thing, which probably limits the moon potential of ENPH.
That's it. That's the post. Thanks for reading.