Nuclear power?

The rapid advancement of artificial intelligence (AI) has created a surge in energy demand, particularly for power-hungry data centers. This escalating need, coupled with global commitments to reduce carbon emissions, is creating a significant opportunity for nuclear power. Several countries have pledged to triple their nuclear energy capacity by 2050, a move supported by major financial institutions . This shift is prompting partnerships between tech giants and nuclear energy providers .

Here are some nuclear power stocks to watch in the wake of the AI boom:

Constellation Energy (CEG)

Constellation Energy is a leading clean-energy producer in the U.S. with a significant portion of its output from nuclear power. The company is well-positioned to benefit from the growing demand for carbon-free energy, as evidenced by its recent 20-year power purchase agreement with Microsoft. This agreement includes the potential restart of Three Mile Island Unit 1, highlighting the company's commitment to expanding its nuclear capacity. Constellation's nuclear fleet has production contracts with 100% certainty into 2029, including fuel cycle contracts into the 2030s. Its shares are up more than 66% year-to-date .

Cameco (CCJ)

Cameco is a major player in the uranium industry with mining operations globally [3]. Its significant production capacity and strategic partnerships strengthen its position in the nuclear services sector.  The increasing demand for uranium, a key component in nuclear power generation, makes Cameco a potentially attractive investment. Cameco sells uranium and fuel services products to nuclear utilities in 15 countries, including the U.S. In November 2023, it acquired 49% of a joint venture with Brookfield Asset Management to acquire 100% of Westinghouse Electric Company, which designs, constructs, and operates nuclear power plants. Westinghouse has approximately 50% market share in the nuclear reactor business with facilities in 20 different countries. Its shares have risen 310% over the past five years.

BWX Technologies (BWXT)

BWX Technologies has been at the forefront of developing nuclear technologies. The company receives the bulk of its revenue from government contracts, particularly to supply the U.S. Navy with nuclear propulsion. BWX's business is divided into two reportable segments: government operations and commercial operations. In 2023, government operations accounted for 81% of its $2.50 billion in revenue, 12% higher than in 2022 [2]. The company has been in the nuclear energy business for over 60 years. Its stock isn't cheap at 31.9x those earnings.

Denison Mines (DNN)

Denison Mines is a Canadian uranium exploration and development company with a focus on uranium extraction. The company holds near-total (90%) interest in the Wheeler River project, located in the Athabasca Basin, which is deemed to hold proven & probable reserves of 56.7 million lbs U3O3 (uranium trioxide). This project is projected to have a base case operating profit margin of 90.9%. Denison Mines also has a 22.5% stake in McClean Lake with an already operating uranium mill. The company's stock gained 104% value over one year, or 25% year-to-date.

Duke Energy (DUK)

Duke Energy is a large utility company that generates 28.4% of its energy needs from nuclear power. The company is investigating the deployment of small modular nuclear reactors (SMRs). Duke's CEO Lynn Good sees SMRs as a potential jumping board to "invest at the commercial scale necessary to make a difference". Duke serves 8.2 million U.S. customers and is the largest nuclear operator in the U.S. Its shares gained only 5% of value over five years, but its dividend payouts continue to rise, now at $4.10 annual dividend per share 

Nuscale Power (SMR)

Nuscale Power is a company that develops small modular reactors (SMRs). SMRs are smaller nuclear reactors that can be built faster and closer to the grid since they have a smaller footprint. They can also be scaled, meaning they can be built and deployed in increments as power needs grow. Nuscale is the only company to secure standard design approval from the U.S. Nuclear Regulatory Commission for its 50-megawatt SMR. While SMR technology is still years away from deployment, Nuscale is at the forefront of an exciting technological revolution in nuclear energy.

X-energy

X-energy is a developer of next-gen SMR reactors and fuel. Amazon has invested $500 million in its Series C-1 financing round, with the goal of bringing 5 GW of electricity online by 2039. X-energy's nuclear reactor design is expected to be used in the 320 MW Energy Northwest project.

Kairos Power

Kairos Power is a developer of SMRs that Google has partnered with to purchase nuclear energy.  Google expects the first SMR to come online by 2030, with more coming online through 2035, generating 500 MW for the grid.

Oklo

Investing in - Early Stage Company: Oklo is still in its early stages of development and has yet to generate significant revenue. This makes it a high-risk investment, as its success depends on its ability to execute its plans and secure funding. Power Stocks

Investing in nuclear power stocks can be a way to capitalize on the growing demand for clean energy. However, it's important to remember that investing involves risk, and past performance is not indicative of future results. 

Key Takeaways

- The AI boom is driving a surge in energy demand, creating a significant opportunity for nuclear power.

- Several companies are well-positioned to benefit from this growing demand, including Constellation Energy, Cameco, BWX Technologies, Denison Mines, Duke Energy, Nuscale Power, X-energy, and Kairos Power.

- Investing in nuclear power stocks can be a way to capitalize on this trend, but it's important to conduct thorough research and consult with a financial advisor before making any investment decisions.

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