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These Nuclear Power Stocks Are Exploding Because Big Tech Thinks It Can Meet AI’s Energy Demands

Umito October 26, 2024

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The emergence of AI as “the next big thing” in technology has revolutionized the way almost every industry does business. The only problem is that AI’s unquenchable thirst for power has left big tech struggling to find an adequate fuel source. This quest for power has led many Big Tech companies to partner with nuclear energy companies to create small modular reactors (SMRs). These partnerships create enormous investment opportunities in the energy sector.

Although oil and coal companies continue to provide the fuel needed for global shipping and air transportation, nuclear stocks like Constellation Energy And Vistra are booming thanks to their potential to meet the energy demands of AI. Originally, nuclear power was seen as a potential substitute for fossil fuels, which it still has the potential to do.

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However, the ability of nuclear power providers to build at scale and create SMRs, which are mini nuclear power plants that could power big tech AI, is breathing new life into this sector of the energy industry . SMRs would produce renewable energy, giving Big Tech a fuel source that is not subject to supply disruptions or price spikes due to global instability.

Constellation Energy’s stock value has increased more than 100% this year. This increase is largely due to an agreement between Constellation and Microsoft to supply it with nuclear power for the next 20 years. As part of the deal, Constellation will reopen the Three Mile Island nuclear power plant in Pennsylvania, which has been shuttered since a near-meltdown in 1979. Ironically, this near-disaster has soured many Americans on energy nuclear.

Today, nuclear energy is making a comeback. Of all the renewable fuels available, nuclear is one of the few that can generate enough energy to power massive operations such as power grids or the large-scale data centers that AI needs to reach its full potential potential. More importantly, nuclear power now has federal support.

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Ali Zaidi, a climate adviser to the Biden administration, recently attended a meeting on nuclear energy sponsored by Reuters. At that meeting, he endorsed the reopening of shuttered nuclear power plants and touted the potential of SMRs as the next evolution of nuclear reactors. The other important aspect of nuclear power and SMRs is that, unlike other proposed renewable energy solutions, nuclear power already exists and has proven to be effective as a major energy source.

Zaidi told conference attendees: “SMR is a technology that will not be a game decades from now. It’s a model that American companies are looking to deploy this decade. This real-time availability and its importance to the continued development of AI gives nuclear power stocks the potential to soar, similarly to data center REITs and chipmakers like Nvidia or Broadcom.

If the needs of AI outstrip the current infrastructure needed to unlock its full potential, industries that provide logistical support could offer investors huge benefits. So if you missed Nvidia or Broadcom before their stock prices skyrocketed, you still have great opportunities to profit from nuclear power stocks. Keep a close eye on this sector and be ready to pounce when the opportunity presents itself.

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