The case for a nuclear comeback: AI, policy, and power demand

Key points:

• AI and data center demand are supercharging interest in nuclear energy as stable, carbon-free baseload power regains favor.
• Policy support is accelerating, with the U.S. preparing to invoke the Defense Production Act and fast-track reactor approvals, while global players from China to France accelerate nuclear expansion.
• Investor momentum is strong across the nuclear value chain, but risks remain—from overvalued early-stage stocks to project delays, cost overruns, and lingering public skepticism.

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Nuclear energy stocks are experiencing a significant resurgence, propelled by escalating electricity demands from AI data centers, supportive regulatory shifts, and strategic partnerships with tech giants.

Catalysts behind the nuclear revival

1. Policy momentum

The U.S. government is signaling strong support for nuclear energy. President Trump has included nuclear energy in his recent executive orders and appointed nuclear advocate Chris Wright—a former board member at SMR developer Oklo—as Energy Secretary. Wright has named the “commercialization of affordable and abundant nuclear energy” as one of his department's top priorities. Reports also indicate plans to invoke the Defense Production Act to reduce dependence on foreign uranium and expedite domestic reactor approvals. This policy pivot aims to bolster national energy security and stimulate the nuclear sector.

2. AI and data center energy demands

The rapid expansion of AI technologies and data centers is driving unprecedented electricity consumption. With solar and wind facing storage and reliability challenges, nuclear energy's consistent output positions it as a viable solution to meet this surging demand.

3. Tech industry collaborations

Major tech companies are entering long-term agreements with nuclear energy providers to secure sustainable power sources. For instance, Amazon Web Services acquired a data center powered by Talen Energy's Susquehanna nuclear plant, highlighting the tech sector's commitment to nuclear energy. Meta has also signed a 20-year nuclear deal with Constellation Energy to meet its AI ambitions.

4. Global momentum

France, Japan, South Korea, and even China are accelerating nuclear plans. Attendance at the Nuclear Energy Institute’s finance summit surged 50% this year—evidence of fast-rising institutional interest.

What are the risks?

While the long-term story looks promising, investors should tread carefully. The nuclear sector carries significant risks:

• Sky-high valuations: Start-up nuclear firms like Oklo and NuScale Power have surged 300–700% over the past year—despite no commercial plants yet built. The risk of overpaying is high.
• Cost overruns and delays: The last major U.S. nuclear plant expansion ran $15B over budget. The industry is now lobbying for federal guarantees to backstop such risks—a crucial but unresolved issue.
• Commercial viability of SMRs: Small Modular Reactors are seen as the future—but most are at least a decade away from widespread deployment. Near-term benefits may be limited.
• Public sentiment and political cycles: Nuclear still faces lingering public skepticism and policy whiplash depending on who's in office. Long-term stability is not guaranteed.
• Waste disposal and safety concerns: These remain unresolved in many regions and could resurface as public opposition.
• ESG considerations: While nuclear power is low-carbon and increasingly included in some green taxonomies (like the EU’s), ESG-focused investors remain divided. Concerns over radioactive waste, accident risk, and long-term storage can lead to exclusion from ESG funds or indices.

Key nuclear-themed stocks

1. Nuclear power generators

• Constellation Energy (CEG) – U.S. leader with a strong existing fleet and long-term tech partnerships (Meta, Microsoft).
• Vistra Corp. (VST) – Expanded nuclear capacity via Energy Harbor acquisition; positioned for growth.
• Talen Energy (TLN) – Supplying data centers with nuclear power via its Susquehanna plant.
• Duke Energy (DUK) & Dominion Energy (D) – Traditional U.S. utilities with long-standing nuclear operations.

2. Uranium miners

• Cameco (CCJ) and NexGen Energy (NXE) – Canada-based miners with global exposure.
• Energy Fuels (UUUU), Uranium Energy Corp (UEC), Denison Mines (DNN) – U.S. players well-positioned to capture positive policy momentum.

3. Next-generation developers

• NuScale Power (SMR): A poster child for SMRs, but has yet to deliver commercial success. Potentially high risk, high reward.
• Oklo Inc. (OKLO): Another SMR developer with ties to the current U.S. energy secretary. Upstart with big ambition—but unproven tech.
• BWX Technologies (BWXT) – Leading microreactor and defense supplier.
• Rolls-Royce Holdings (RR) – UK-based SMR frontrunner with government backing. Seen as one of the most advanced SMR developers globally.

4. International plays

• China: China National Nuclear Power (601985), CGN Power (1816) – Expanding rapidly under state support.
• Japan: Japanese utilities like Kansai Electric (9503), Tokyo Electric (9501) are restarting reactors post-Fukushima. Sentiment improving as the government ramps up nuclear restarts.
• Australia: No domestic nuclear power industry due to regulatory restrictions, but Australian-listed uranium miners like Paladin (PDN), Boss Energy (BOE).
• Europe: France’s EDF or legacy exposure via Engie and UK’s Centrica, though these are not pure plays.