The U.S. and Iran exchanged fire on Aug. 31, marking the first direct military escalation between the two countries in roughly a month. U.S. forces struck two Iranian rocket launchers on Larak Island after Washington said Iran was preparing to deploy sea mines in the Strait of Hormuz. Iran subsequently launched ballistic missiles toward U.S. forces in Jordan.

The renewed tensions highlight the vulnerability of global energy supplies to geopolitical shocks. Investors should therefore look beyond traditional oil plays. Three stocks worth investigating are Bloom Energy Corporation (BE Quick QuoteBE - Free Report) , NANO Nuclear Energy Inc. (NNE Quick QuoteNNE - Free Report) and XPLR Infrastructure, LP (XIFR Quick QuoteXIFR - Free Report) .

The strategic case for alternative energy could strengthen as the conflict persists. The Strait of Hormuz is a critical global energy artery, historically carrying about one-fifth of the world's oil supply. Any prolonged disruption can raise crude prices, increase inflationary pressure and expose countries heavily dependent on imported fossil fuels to significant economic risk.

That vulnerability creates a powerful incentive to diversify energy sources. Nuclear power can provide reliable, low-carbon electricity without relying on oil shipments through vulnerable chokepoints. Renewable energy, grid modernization and advanced power-management technologies can reduce dependence on imported hydrocarbons.

For investors, the Iran conflict may therefore represent more than a short-term energy-price shock. It could accelerate government and corporate spending on nuclear generation, uranium supplies, renewable infrastructure and resilient electricity networks.

While geopolitical tensions will eventually ease, the underlying lesson for policymakers is likely to remain: energy security increasingly requires diversification. That makes alternative energy companies potential long-term beneficiaries of today's instability.

Our Choices

The stocks below have Zacks Rank #1 (Strong Buy) or Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Bloom Energy designs and sells solid oxide fuel cell systems and electrolyzers for on-site electricity generation and hydrogen production, serving utilities, data centers and other industries. BE’s expected earnings growth rate for the current year is 238.2%. The Zacks Consensus Estimate for its current-year earnings has improved 24.2% over the past 60 days. It currently sports a Zacks Rank #1.

NANO Nuclear develops advanced microreactors, including KRONOS, LOKI, ZEUS and ODIN, while pursuing nuclear fuel processing, transportation and consulting businesses. NNE’s expected earnings growth rate for the current year is 24.5%. The Zacks Consensus Estimate for its current-year earnings has increased 15.8% over the past 60 days. It currently carries a Zacks Rank #2.

XPLR Infra operates contracted clean energy assets, including wind, solar and battery storage projects, across the United States. XIFR’s expected earnings growth rate for the current year is 136.7%. The Zacks Consensus Estimate for its current-year earnings has increased 108.2% over the past 60 days. It currently flaunts a Zacks Rank #1.

Bottom Line

The escalating U.S.-Iran conflict underscores the risks of relying heavily on fossil fuels and vulnerable energy chokepoints. As countries prioritize energy security and diversification, alternative energy companies could benefit from increased investment in nuclear power, renewable generation and resilient infrastructure. The stocks mentioned above offer investors exposure to these long-term trends, backed by favorable Zacks Rank and rising earnings estimates.