Nuclear energy stocks and uranium companies have skyrocketed over the last month as Wall Street dives into the stocks that will power the artificial intelligence (AI) age.
NuScale Power, Oklo, Cameco, Centrus Energy, and other nuclear stocks have soared since Microsoft announced its massive nuclear energy deal with Constellation on September 20. Since then, Google and Amazon made splashy nuclear energy investments to fuel their AI expansions.
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The U.S. in late 2023 headed up a coalition of countries pledging to triple nuclear energy capacity by 2050.
Why Investors Should Buy and Hold Nuclear Energy Stocks
Nuclear energy is ready to become the star of the clean energy transition because nuclear is 2X more reliable than natural gas and 3X times more dependable than wind and solar, according to the U.S. Department of Energy. Plus, nuclear energy already provided 50% of America’s carbon-free electricity in 2023, making it the most significant domestic source of clean energy.
The U.S. government is actively supporting the rapid revival of the nuclear power industry through various bills to help rollout next-gen small modular reactors, update older reactors, and jump start uranium production. The government backing has made it easier for technology giants to invest heavily in their nuclear-powered futures as their energy demands explode.
Amazon on Wednesday became the latest mega-cap technology company to go all-in on nuclear energy to power its artificial intelligence growth—AMZN made a data center-AI deal with nuclear power company Talen earlier this year. Amazon’s AMZN nuclear announcement came just days after Alphabet’s GOOGL Google struck a deal with next-gen nuclear energy startup Kairos Power.
Fellow technology titans such as Apple, Nvidia, Meta, and others are likely to jump on the nuclear energy train soon as they look for clean consistent power sources to support their exploding AI-based energy use.
NuScale Power (SMR), Cameco (CCJ), and Centrus Energy Corp. (LEU) stocks have all surged at least 50% since early September, while Sam Altman-backed (OpenAI and ChatGPT) Oklo OKLO has skyrocketed nearly 200%.
Buy NuScale Power Stock as a Home-Run Nuclear Energy Investment?
NuScale Power Corporation SMR is an industry-leading provider of proprietary and innovative advanced small modular reactor nuclear technology. NuScale boasts that it is the first and only small modular nuclear reactor company to have its design certified by the U.S. Nuclear Regulatory Commission—small modular nuclear reactors are high-tech, smaller, less costly reactors that can be built more quickly and operate in far more locations.
NuScale has reached various agreements and deals with power companies and governments in Europe, North America, and Asia to help bring small modular reactors online.
Still, NuScale stock is a home-run swing that is heavily shorted and losing money. SMR’s revenue is expected to dip 10% in 2024 to $20.4 million and soar 954% in FY25 to $215 million.
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NuScale stock has climbed roughly 160% since September 6 and 450% YTD. SMR shares broke out to new all-time highs on Wednesday, topping its August 2022 (IPO May 2022) and July 2024 levels.
SMR stock trades at heavily overbought RSI levels and well above its 21-day moving average. The home-run stock has been volatile and cannot go straight up forever. Therefore, investors might want to wait for a pullback to its 21-day or longer-term moving averages.
Risk-adverse investors might decide to buy Fluor (FLR) stock instead since Fluor owns 51% of NuScale Power. Fluor said this summer it is working toward “selling down the majority of our shares (of NuScale Power) to a strategic investor that will take the commercialization forward.” Fluor stock surged 8% on Wednesday.
It is possible that a major technology company ends up buying a large stake in NuScale Power. NuScale will release its Q3 financial results on Thursday, November 7.
Why Centrus Energy Is a “Strong Buy” Nuclear and Uranium Stock
Centrus Energy Corp. LEU is a diversified supplier of nuclear fuel components and services for commercial nuclear power plants in the U.S. and globally. The Bethesda, Maryland-headquartered company in late 2023 inaugurated the first new U.S.-technology, U.S.-owned uranium enrichment plant to begin production since 1954.
Centrus also delivered High-Assay Low-Enriched Uranium to the U.S. Department of Energy last year. The current fleet of nuclear reactors runs on uranium fuel enriched up to 5%. HALEU (High-Assay Low-Enriched Uranium) is enriched between 5% and 20% and is required for the next-gen SMRs.
Centrus works with some upstarts in the small modular nuclear reactor space, including Bill Gates-backed TerraPower. Centrus posted a beat-and-raise second quarter. Its CEO said LEU is “vigorously competing for this funding (more than $3.4 billion in appropriations from Congress – the largest federal investment in uranium enrichment in decades) as we believe it represents a historic opportunity to restore America’s nuclear fuel supply chain with U.S. technology.”
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Centrus’ upbeat earnings outlook lands it a Zacks Rank #1 (Strong Buy) right now. Centrus stock has soared 110% since September 6 after finding support at its 200-week moving average. Centrus needs to break above its late 2021 levels (10-year highs) before it can march back to its pre-financial crisis records.
Some investors might want to wait for Centrus stock to cool off following its rally. But it might be worth taking a long-term flyer on Centrus as a pure-play bet on uranium and the U.S. nuclear revival.
Why Cameco is a Must-Own Nuclear and Uranium Stock
Cameco CCJ is a Canadian uranium miner and a leading supplier of uranium refining, conversion, and fuel manufacturing services. Cameco is the only large-scale uranium miner stock most regular retail investors can buy. For instance, Kazakhstan produces 43% of the world’s uranium (for comparison OPEC member countries produce about 40% of the world’s crude oil).
Cameco is the second-largest uranium producer in the world, according to the World Nuclear Association. Cameco boasts two of the highest-grade mines on the planet located in northern Saskatchewan, Canada. CCJ maintained its 2024 outlook this summer and CEO Tim Gitzel said full-cycle support has emerged for nuclear energy.
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Cameco’s adjusted earnings are projected to soar in 2024 and 2025 on the back of double-digit revenue growth. Cameco’s earnings outlook includes downward earnings revisions alongside the drop in uranium prices.
Cameco stock has skyrocketed 500% in the past five years. CCJ has soared 50% since early September after finding support near its 52-week lows and its 21-month moving average. CCJ stock closed near 52-week highs on Wednesday.
Cameco stock is on the cusp of breaking out into a new trading range as it moves higher above its 2007 levels.
CCJ is ready to thrive in the new nuclear age fueled by its standing as one of the uranium mining and refining giants in a stable part of the world. It is no surprise that Wall Street loves Cameco, with 11 of the 13 brokerage recommendations Zacks has at “Strong Buys,” alongside two “Buys.” The company also pays a dividend with a sustainable payout ratio.
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