A tropical system that developed near the Texas Gulf Coast has become Tropical Storm Arthur, the first named storm of the 2026 Atlantic hurricane season. Forecasters warn the storm could dump as much as 20 inches of rain across parts of Texas, Louisiana, Mississippi, Alabama, and portions of the Southeast, raising concerns about flash flooding and infrastructure damage.

The storm arrives just weeks after the official start of hurricane season on June 1, and it serves as an early reminder that weather-related risks can quickly create opportunities for certain sectors of the market.

As we saw in 2025, hurricane season remained active, producing 13 named storms. This year could be another busy one. Early forecasts from Colorado State University and AccuWeather call for 11 to 16 named storms, four to seven hurricanes, and two to four major hurricanes. With Gulf waters remaining unusually warm, meteorologists expect favorable conditions for tropical development throughout the summer and fall.

For investors, that could create opportunities in companies tied to storm preparation, infrastructure repair, emergency response, and backup power demand.

Generac: A Leader in Backup Power Demand

One of the most popular hurricane-season trades has been Generac Holdings (NYSE: GNRC).

The company is a leading manufacturer of residential standby generators and mobile power systems. Historically, demand for generators tends to rise as hurricanes threaten populated regions and homeowners prepare for potential power outages.

The stock has shown a strong tendency to rally during the tropical storm season. In late May 2025, shares traded near $122 before climbing to roughly $200 by August. Similar seasonal moves occurred in 2024 and 2023 as investors anticipated increased generator demand.

Beyond hurricanes, Generac is also benefiting from growing concerns about aging electrical infrastructure, grid reliability, and extreme weather events. As storms become more frequent and severe, more households and businesses are investing in backup power solutions before outages occur.

Home Depot and Lowe’s: Retail Winners in Storm Recovery

Home improvement retailers can also see a boost when storms approach.

Historically, both Home Depot (NYSE: HD) and Lowe’s (NYSE: LOW) have benefited from increased demand for plywood, roofing materials, tools, generators, tarps, cleaning supplies, and other products needed before and after major storms.

According to Morgan Stanley, the home improvement sector is “naturally positively exposed” to both hurricane preparation and recovery efforts. Following major storms, rebuilding activity can support sales for months as homeowners and contractors repair damaged properties.

Seasonal performance reflects that trend. Home Depot climbed from approximately $350 in May 2025 to about $425 later in the season. Lowe’s advanced from roughly $220 to $270 during the same period.

With another active hurricane season expected, investors may once again turn to these names as storm-related spending accelerates.

Xylem: Flood Management and Water Infrastructure Play

Another hurricane play is Xylem (NYSE: XYL).

The company specializes in water infrastructure, flood management, pumping systems, and emergency response equipment. Xylem works with municipalities, counties, and private organizations to prepare for and respond to natural disasters.

As coastal communities face heavier rainfall and increased flooding risks, demand for water management solutions continues to grow. That trend could be especially important this year as Tropical Storm Arthur highlights the flood risks posed by even relatively weak tropical systems. Forecasters say rainfall, rather than wind, may be the storm’s most dangerous threat.

The stock has historically performed well during hurricane season, climbing from $121 to $155 in 2025 and posting seasonal gains in both 2024 and 2023.

Key Takeaways for Investors in Hurricane Season 2026

No investment is guaranteed to rise simply because hurricane season is active. However, history shows that certain companies often benefit when storms increase demand for generators, home repair materials, emergency equipment, and water infrastructure solutions.

With Tropical Storm Arthur already bringing flooding concerns to the Gulf Coast and forecasters calling for another potentially active Atlantic season, investors may want to keep companies such as Generac, Home Depot, Lowe’s, and Xylem on their radar. If storm activity accelerates in the months ahead, these hurricane-season stocks could continue to benefit.

Early forecasts from groups including Colorado State University (CSU) and AccuWeather suggest 11 to 16 named storms, four to seven hurricanes and two to four major hurricanes (Category 3 or stronger).

For investors, that could create another opportunity in hurricane season stocks tied to storm preparation, infrastructure repair, emergency response, and backup power demand. Historically, several companies have seen stronger sales and rising share prices as hurricane activity intensifies during the summer and early fall. 

We mention this because we can profit from hurricane season by investing in stocks, such as:

Generac Benefits From Rising Generator Demand

In late May 2025, Generac Holdings (NYSE: GNRC), which markets home standby generators and is the leading global manufacturer of mobile generators for industrial use, traded at about $122. It would rally to $200 a share by August. In 2024, it ran from about $149 in early June to a high of $200. In 2023, it ran from about $107 to a high of about $157.

Generac has a very strong history of running ahead of forecasts during hurricane seasons. That’s because when there’s a loss of power, generators see significant demand.

The company is also benefiting from broader concerns about grid reliability and extreme weather events across the United States. As storms become more severe, homeowners and businesses are increasingly investing in backup power solutions before outages occur.

Home Improvement Stocks Often Benefit During Hurricane Season

Home Depot (NYSE: HD) and Lowe’s (NYSE: LOW) historically stand to benefit from increased sales of plywood and other home improvement goods.  This segment is “naturally positively exposed to preparation and recovery efforts,” says Morgan Stanley.  These “typically see a boost in sales post-storm as damaged property is repaired.”

In May 2025, shares of Home Depot ran from about $350 to a high of $425 with hurricane season and, of course, warmer summer weather. In 2024, it ran from about $315 to a high of $410. In 2023, it ran from about $276 to a high of $315. 

With LOW, in May 2025, it ran from about $220 to $270. In May 2024, it ran from about $218 to about $273. And in May 2023, it ran from about $192 to $220.

Investors often rotate into these hurricane season stocks because repair demand can remain elevated for months after major storms make landfall. Roofing materials, generators, lumber, tools, and cleanup supplies frequently see spikes in demand during active storm periods.

Xylem Could Benefit From Storm Infrastructure Demand

Xylem (NYSE: XYL) has a history of running higher in hurricane seasons, too.  

All as it works with “cities, counties and companies to create contingency plans that map out emergency response strategies and identify the required pumping equipment to react to natural disasters.” XYL also has a historical tendency to run higher throughout hurricane season.

In 2025, for example, it ran from $121 to $155. In 2024, it ran from $129 to $142. In 2023, it ran from about $100 to about $113.

Water infrastructure and flood management systems are becoming increasingly important as coastal regions face stronger storms and heavier rainfall. That trend could continue supporting demand for companies focused on emergency water management and disaster-response infrastructure.

Seasonal Hurricane Trades May Offer Opportunity

As hurricane season approaches, investors may want to keep a close eye on companies tied to storm preparation, recovery, and infrastructure support. Historically, stocks such as Generac, Home Depot, Lowe’s, and Xylem have seen increased investor interest as demand rises for generators, repair materials, water management solutions, and emergency equipment.

While no trade is guaranteed, seasonal trends and growing storm activity could once again create opportunities in these names as the 2026 hurricane season unfolds.