The Trump administration is looking to fast-track the deployment of nuclear reactors in the U.S. The move comes as the sentiment around nuclear power shifts, and countries worldwide commit to ramping up their nuclear energy production.
Numerous nations have signed the Declaration to Triple Nuclear Capacity, signaling a dramatic change in the perception around nuclear energy, after it fell out of favor following Japan's Fukushima nuclear accident in 2011.
The International Atomic Energy Agency forecasts that nuclear production capacity could increase 2.5 times by 2050, from 372 gigawatt-electric (GWe) in 2023 to 950 GWe by 2050. But here's the catch: To realize this growth, new reactors must come online, creating strong tailwinds for the nuclear energy sector and related stocks.
Here are three nuclear stocks that stand to benefit over the long term from this increased interest.
Image source: Getty Images.
1. Constellation Energy
Constellation Energy(NASDAQ: CEG) is the largest producer of carbon-free electricity in the United States, with an emphasis on nuclear power. This focus on nuclear energy gives it a reliable source of electricity that isn't affected by weather fluctuations, unlike solar and wind, which can be quite unpredictable. Constellation's fleet of nuclear plants operates near full efficiency most of the time, complementing other renewable sources nicely.
Moreover, the rising demand for energy from data centers and tech companies, particularly those involved in artificial intelligence, has boosted Constellation's appeal. Last year, Microsoft entered into a power purchase agreement with Constellation, committing to buy nuclear energy to power its data centers. Constellation plans to restart the Three Mile Island Unit 1 reactor as part of this deal.
Constellation is well-positioned as a top carbon-free energy provider, and more technology companies could turn to it to power their growing needs. Its large nuclear plant footprint and renewable focus position it well for the next several decades.
2. Cameco
As one of the largest uranium producers, Cameco(NYSE: CCJ) is a major player in the industry. With its operations primarily based in Canada, Cameco operates uranium mines at Cigar Lake and McArthur River. It also plays a role in the nuclear fuel cycle, which involves everything from uranium conversion to enrichment.
As global demand for nuclear energy rises, Cameco is well-positioned to benefit from increasing uranium prices and new nuclear reactor construction. This makes it an intriguing option for investors, especially given its robust presence in North America and its stakes in Westinghouse and Kazatomprom (located in uranium-rich Kazakhstan).
What makes Cameco appealing is its long-term contracts with utility companies, providing it with a reliable buyer and a visible source of revenue in the future. Cameco has arrangements to provide an average of 28 million pounds of uranium annually through 2029.
Cameco also has properties in Saskatchewan and Australia with significant uranium deposits, allowing it to expand as demand for nuclear energy grows.
3. NuScale Power
NuScale Power(NYSE: SMR) is an innovator in the space thanks to its cutting-edge small modular reactors (SMRs). These next-generation reactors are designed for efficiency and prioritize safety and scalability, making them a compelling option for power generation.
Unlike large-scale nuclear plants, which can be cumbersome and complex, SMRs are compact and modular. This means they can be manufactured in a factory and transported to locations as needed, and tailored to specific power demands. This capability makes them well-suited for decentralized power generation to supply energy to smaller grids, industrial facilities, or remote areas where conventional options aren't feasible.
NuScale has a first-mover advantage in the SMR market, which will take some time to ramp up. The company's 50 MWe (megawatt electric) SMR is the first approved by the U.S. Nuclear Regulatory Commission. To increase cost-effectiveness, it's in the process of upsizing its reactor to 77 MWe and anticipates receiving approval for this larger design sometime this year.
It will take time before SMRs are deployed on a large scale, so investors will want to be patient if buying NuScale Power today. The company is developing an SMR power station in Romania, targeting a launch date of 2029. For that reason, NuScale is best suited for aggressive investors who are ready to hold onto their shares for the long run to capitalize on the growth of this potentially transformative technology.
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Courtney Carlsen has positions in Cameco and Microsoft. The Motley Fool has positions in and recommends Constellation Energy and Microsoft. The Motley Fool recommends Cameco and NuScale Power and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
