Two New Tailwinds for the Nuclear Renaissance

Editor's note: Once dismissed as unsafe, nuclear power is now at the center of America's energy renaissance. In this issue – adapted from This Week on Wall Street – Stansberry Research's Director of Research Matt Weinschenk explores how government backing, shifting public sentiment, and rising energy needs are fueling nuclear's comeback... And he covers the opportunities for investors.

A new energy future is taking shape...

Oklo (OKLO) – a startup working to produce nuclear power via small reactors – recently won a major deal with the U.S. government.

In June, the company announced that the Defense Logistics Agency Energy – which buys fuel and power for U.S. bases – issued a notice of intent to sign a long-term power-purchase agreement for one of its 75-megawatt microreactors.

The microreactor will supply power to the Eielson Air Force Base in Alaska. Eielson sits just south of the Arctic Circle... And it spends heavily on diesel and coal.

Microreactors like the ones Oklo produces are a huge step up in the energy industry. They're between 100 and 1,000 times smaller than conventional nuclear reactors. That means they can be more easily transported to remote areas.

And this is only the latest in the nuclear renaissance that's taking shape in the U.S...

In May, President Donald Trump issued a flurry of executive orders to boost domestic nuclear power production.

They deal with things like streamlining the production and recycling of nuclear fuel... making it easier to build, test, and get permits for nuclear reactors... and encouraging the use of nuclear technology in military applications.

Nuclear-related stocks soared on that news, too... continuing a trend that has driven the energy market for the past year.

This is quite a reversal. For decades, nuclear power has suffered from bad publicity. But since nuclear energy produces zero emissions, it has slowly turned into an environmental darling.

And nuclear's image really took off with the emergence of artificial intelligence ("AI")...

When ChatGPT was released in November 2022, it kicked off a national frenzy over generative AI.

Forward-thinking investors immediately realized that AI would require massive amounts of electricity. A big data center, for instance, can use as much power as an entire U.S. city.

As a result, demand for electricity is on the rise...

For about 15 years, U.S. electricity consumption was flat. Now, it's expected to grow by 2% to 3% per year.

Low-single-digit growth doesn't sound like much... But it takes a massive investment to add that much power to the grid. The International Energy Agency estimates that global investment in electricity will reach $1.5 trillion this year.

With numbers that high, it's clear that nuclear energy must become a bigger part of our power generation.

As investors, we have a few ways to play the nuclear-energy boom...

Nuclear Energy Is Lighting Up Wall Street

First, there are the big utility companies that deliver electricity to customers.

Investors usually consider utilities to be boring dividend-payers. They're steady, but slow growers. That's changing, though.

Utilities have surged on the new expectations for power demand. And those with nuclear operations have done even better.

Take Constellation Energy (CEG)...

The company owns various nuclear, solar, wind, and other renewable energy facilities. Constellation operates 15 separate nuclear-power projects in the U.S. Last September, it announced that it would restart the reactor at Three Mile Island... And in June, it announced a 20-year deal to provide nuclear energy to some of Meta Platforms' (META) data centers.

Constellation was supposed to be a boring utility. But shares are up sevenfold since 2022...

Second, instead of operating existing nuclear plants, some companies – like Oklo – are trying to innovate in the industry...

These companies want to make what are called small modular reactors ("SMRs"). Rather than the standard giant, multibillion-dollar power plants, SMRs can be built in a factory and transported by a flatbed truck.

This is new tech, so the path to profits is riskier and longer than that of the established nuclear-power producers. But if it catches on, there's a ton of upside for investors.

And again, the market is already warming up to this idea. Oklo went public via a special purpose acquisition company ("SPAC") in May 2024. After a slow start, shares have soared roughly 700%...

Finally, investors can also bet on the price of uranium directly...

Uranium is the fuel that feeds nuclear power plants. There are also funds that track the price of the metal, like the Global X Uranium Fund (URA).

Nuclear energy will be a key part of our energy generation in the future... And there are opportunities to profit.

Nuclear Power's Renaissance Comes With Risks... and Big Rewards

Of course, there are things to watch for...

These stocks do have high valuations, which always brings some extra risk. It's also possible that financial markets will cool on the AI story, just for a bit.

If that happens, electricity expectations may pare back, and nuclear stocks could take a breather.

There are also concerns that some provisions in Trump's tax bill will slow nuclear power development... countering his executive orders.

Regardless, this is a key industry for investors to watch as demand rises for cleaner, cheaper energy.

Good investing,

Matt Weinschenk

Editor's note: A tiny private firm is developing a way to generate virtually LIMITLESS energy. One insider says this breakthrough could be even more important than the Industrial Revolution. And as it disrupts energy markets, fuels the AI boom, and slashes home energy costs, investors have a rare "backdoor" opportunity to get in early.