The U.S. nuclear energy sector has experienced a remarkable resurgence in recent years, fueled by a combination of the global energy crisis ignited by Russia’s war in Ukraine, a surge in power demand, and nuclear energy’s reputation as a reliable low-carbon solution. As nations reassess their energy strategies, uranium demand has surged, following significant policy reversals in countries like Japan and Germany, which had previously moved to phase out nuclear power. Uranium prices reached unprecedented highs, peaking at $81.32 per pound in February—double the level seen just a year prior. According to the World Nuclear Association, global demand from nuclear reactors is expected to rise 28% by 2030, with projections indicating nearly a twofold increase by 2040. Reflecting this optimism, the VanEck Uranium and Nuclear ETF (NYSEARCA: NLR), a key benchmark for the sector, recently reached an all-time high.
However, last month, nuclear energy stocks faced a sharp downturn, primarily due to market overheating. One of the biggest casualties of this sell-off was NuScale Power Corp. (NYSE: SMR), which saw its stock price plummet by almost 30% within weeks. The drop followed the company’s announcement that it had entered into an agreement with several brokerage firms, potentially offering up to $200 million in common stock. NuScale indicated that the funds would be used for general corporate expenses, capital expenditures, R&D, and working capital. The company specializes in developing small modular reactors (SMRs), which are advanced nuclear systems designed for lower power outputs (50-300 MW per unit) compared to traditional reactors (700+ MW).
Despite the pullback, nuclear stocks have experienced a resurgence, buoyed by the announcement of a massive $500 billion joint venture led by former President Donald Trump. The venture, which involves Oracle Corp. (NYSE: ORCL), OpenAI, and SoftBank (OTCPK: SFTBY), will focus on building AI infrastructure in the U.S. The project, dubbed “Stargate,” has already secured a $100 billion commitment with plans to expand to $500 billion over the next four years. OpenAI, the creator of ChatGPT, aims to support U.S. leadership in AI while potentially generating hundreds of thousands of jobs. Industry giants such as Nvidia (NASDAQ: NVDA), Microsoft (NASDAQ: MSFT), and Arm Holdings (NASDAQ: ARM) are also expected to play key roles in the initiative.
Notably, several nuclear energy companies have benefitted from this resurgence. Over the past year, NuScale’s stock has skyrocketed by 1,175%, while Oklo Inc. (NYSE: OKLO), backed by OpenAI CEO Sam Altman, has surged by 299%. Other notable performers include Vistra Corp. (NYSE: VST), which has jumped by 386%, and Centrus Energy (NYSE: LEU), up by 73%. Additionally, Nano Nuclear Energy (NASDAQ: NNE) has seen its stock rise by 1,017% since its May 2024 IPO. This increase accelerated following the company’s recent patent award for its modular transportable nuclear generators.
Baltimore-based Constellation Energy Corp. (NASDAQ: CEG), a diversified utility firm, has also benefited from the nuclear sector rally, with shares soaring 200% over the past year. The company, which owns a mix of nuclear, wind, solar, natural gas, and hydroelectric assets, has experienced substantial growth as demand for sustainable and low-carbon power sources intensifies.
The nuclear energy rally began in earnest in 2023 after NuScale signed a landmark agreement with Standard Power, a developer of modular data centers, to supply SMRs for two data center locations. As artificial intelligence and machine learning continue to drive massive energy demand, particularly for data centers, SMRs are increasingly seen as a viable solution. The International Energy Agency (IEA) forecasts that global data center electricity consumption will nearly double from 460 terawatt-hours in 2022 to 1,000 terawatt-hours by 2026.
Looking to the future, the nuclear sector’s outlook remains positive, particularly in light of the growing demand for energy to power AI data centers while addressing global climate goals. Goldman Sachs anticipates a compound annual growth rate (CAGR) of 15% for data center electricity demand from 2023 to 2030, predicting that data centers will consume 8% of U.S. electricity by the end of the decade, up from around 3% today. Analysts estimate that an additional 47 gigawatts (GW) of power generation capacity will be needed to meet this demand by 2030.
The nuclear sector is also seeing increasing international commitment. In 2024, 34 countries, including the U.S., pledged to increase nuclear power generation as part of efforts to reduce dependence on fossil fuels. According to the IEA’s Electricity 2024 report, nuclear power generation is set to hit a new global high in 2025, surpassing the previous record established in 2021. The increase will be driven by new reactor deployments in China, India, South Korea, and Europe, along with the reopening of several plants in Japan and a boost in production from France.
The growth of the nuclear industry is closely intertwined with the expanding role of AI and data centers, which promise to be a key driver of energy demand in the coming decade. With strong policy support, technological innovation, and global cooperation, nuclear energy is positioned to play a pivotal role in meeting the world’s energy needs.
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