Nuclear power plant after sunset. Twilight landscape with a large chimney.
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If you’ve been paying attention to the market, especially in recent months, you may have noticed something interesting happening with nuclear energy stocks. Shares of uranium and nuclear power companies such as NuScale Power, Oklo, Cameco and Centrus Energy have soared, driven in large part by landmark nuclear energy deals with big tech companies.
This trend is more than just a market crash, it’s part of a larger movement that will have far-reaching implications for investors, especially as we enter the age of artificial intelligence (AI). Nuclear energy really seems to be making a big comeback.
The AI boom and the need for power
You don’t need to be a technology expert to know that AI is changing everything. From self-driving cars to advanced data analytics, artificial intelligence is rapidly becoming an important part of the modern economy, with a value reaching $184 billion today. But what many people don’t realize is how much electricity is needed to power the data centers that enable AI.
Companies like Microsoft, Amazon, and Google are racing to build data centers that can handle this incredible demand, but doing so requires a lot of energy. According to one estimate, data centers could consume up to 9% of the United States’ electricity by 2030, more than double the electricity used today. This is a staggering amount of electricity and raises serious questions about how to meet that demand in a reliable and sustainable manner.
The problem is that renewable energy sources like wind and solar, despite their popularity, simply aren’t enough to get the job done. Since it is intermittent, it cannot provide power 24/7. That’s where nuclear power comes into play.
nuclear renaissance
Nuclear power has been out of favor in the United States for years. High costs, regulatory hurdles, and deep-seated public fears of accidents like Chernobyl or Fukushima have prevented many people from embracing nuclear power.
But times are changing. This week alone, there were two major announcements that signaled a new era for nuclear energy in the United States.
Amazon has signed a deal to help build several new small modular nuclear reactors (SMRs) in the Pacific Northwest. The reactors, owned and operated by Energy Northwest, will eventually generate enough electricity to meet the needs of more than 770,000 U.S. households. Meanwhile, Google announced a partnership with Kairos Power to bring 500 megawatts of SMR online by 2035.
Perhaps the most eye-catching deal comes from Microsoft, which partnered with Constellation Energy to revive the Three Mile Island nuclear power plant, which will be renamed the Crane Clean Energy Center. It became a hot topic. Microsoft is betting $1.6 billion to restore the factory by 2028 and ensure carbon-free energy for the next 20 years.
Add it all up, and according to the International Energy Agency (IEA), a record amount of nuclear power is expected to be generated in 2025, with more than half of it coming from China and India.
Nuclear power generation next year is expected to reach a new record high
US global investor
A great opportunity for investors?
What is driving these big technology companies to invest in nuclear power? Simple: Nuclear power provides reliable, clean energy 24/7 and has the potential to meet the huge demands of AI-driven data centers. The Electric Power Research Institute (EPRI) recently released a report showing that data center power consumption could more than double by 2030. As demand soars, traditional renewable energy sources like solar and wind power will no longer be able to provide the kind of continuous power provided by companies like Amazon. , Microsoft and Google are required.
In the long run, these technology companies may be making smart bets. Bain & Company predicts that U.S. energy demand could exceed supply within just a few years. By 2028, utilities will need to increase annual power generation by up to 26% to meet projected demand. Nuclear power is uniquely positioned to fill that gap, and it’s no wonder Wall Street is starting to take notice.
Shares of companies like Oklo have soared since the nuclear deal between Microsoft and Constellation was announced. Oklo, backed by OpenAI CEO Sam Altman, soared more than 166% in the month ending in mid-October. Other nuclear stocks such as NuScale and Centrus Energy have also seen impressive gains. For investors looking for exposure to the energy sources that will power the age of AI, nuclear power may just be the next big thing.
U.S. uranium and nuclear stocks soar on hopes of new production capacity
US global investor
A long road ahead
Nuclear power generation is not without its challenges. Building new plants remains incredibly expensive, and the industry has been plagued by cost overruns for years. Let’s take a look at the deal between Microsoft and Constellation. According to Morgan Stanley, Microsoft pays at least 100% above market price for the power it gets from Three Mile Island.
But given the strong demand trends we’re seeing, this could actually be a bargain in a few years. Nuclear power provides reliable, carbon-free electricity at a scale that renewable energy simply cannot match. We also believe that with global data center energy consumption expected to double by 2027, the value proposition of nuclear power will only get stronger.
what this means for you
So what does all this mean for investors? The AI revolution will drive massive electricity demand, and nuclear is well-positioned to be a major player in the energy market for decades to come.
In fact, the entire U.S. energy sector will need a major overhaul to meet future demands. The United States operates the world’s largest nuclear fleet with 94 nuclear reactors, but that is not enough. I believe that to ensure energy security and meet carbon reduction targets, we need to significantly expand our current fleet.
