Nuclear Power Reaches Critical Mass: Top Stocks to Watch Now

Key Points

• Oklo, Inc. is on track for its first nuclear power-generating project to come online in 2027. 
• NuScale Power Corporation is working on two projects with Standard Power that are expected to come online by the end of the decade.
• Cameco mines and refines uranium, makes fuel rods, and provides equipment and services.

Amazon’s NASDAQ: AMZN $500 million investment in nuclear power is a sign that nuclear power has reached a critical mass. Not the company’s first investment in nuclear and not the first investment by a major tech company, the news shows how important nuclear is for AI and the evolution of technology. Amazon, Google NASDAQ: GOOGL, and Microsoft NASDAQ: MSFT are all investing in nuclear energy, and others will likely follow suit because advancements in nuclear energy technology are a win-win for the industry. Nuclear energy can provide sufficient power to offset the growing data center need, is scalable, reduces greenhouse gas emissions, is cost-efficient, and supports the national grid. 

The best way to play the technology market today is to sit back and watch because the run-up in share prices sparked by Amazon is a front-running reality. Advanced nuclear technology is progressing, and investment cash is flowing into the industry, but it is still a long way from making profits, let alone revenue. 

Companies like Oklo Inc NYSE: OKLO and NuScale Power Corporation NYSE: SMR are good investments but highly speculative, and their share prices will likely retreat to more stable support levels soon. Investors should wait until the hype cools off and more attractive price points are available. The better investment is in uranium mining and refining because companies like Cameco NYSE: CCJ are making money today. 

Oklo Inc.: Fast Reactor Technology on Track for Operation in 2027

Oklo Inc. focuses on fast reactor technology. Fast reactors don’t slow down the neutrons like traditional reactors and can operate more efficiently, exponentially extending the time between refueling. It is the most advanced fast reactor company, progressing steadily toward U.S. Energy Department certification. It has site-specific approval for a project in Idaho slated for operations to begin in 2027. Its major partners include Apple NASDAQ: AAPL, Tesla NASDAQ: TSLA, SpaceX, Netflix NASDAQ: NFLX, Google, Boeing NYSE: BA, and OpenAI’s Sam Altman. 

Size is among the advantages for business and industry. Oklo’s smallest reactor is 15 MW and comes in 50— and 100-megawatt modules. Reactors can be linked to scale up to project requirements ranging from data centers to site-specific industrial needs and public utilities. Another advantage is safety. Oklo’s fast reactors don’t require water, recycle spent fuel to extend operational time, and are self-stabilizing. 

The company is well-capitalized and able to sustain operations for the foreseeable future. At the end of Q2, cash was nearly $300 million, with no long-term debt and a total liability of less than $30 million. However, costs will ramp higher as construction begins, so there is a risk of dilution. Analysts rate it as a Hold and view it as 50% overvalued, trading near $19. Short interest is relatively high and likely to remain high for the foreseeable future. 

NuScale Small Modular Reactors Receive Federal Approval

NuScale Power Corporation manufactures and markets the NuScale Power Module and VOYGR scaling platform. It is the first small modular reactor design to receive U.S. federal approval and is on track to launch its first projects by the decade's end. The latest news is a partnership with Standard Power that includes two SMR facilities. The facilities will be colocated with Standard Power’s state-of-the-art data centers, which service the cryptocurrency and AI industries. 

Analysts rate this stock as a Moderate Buy but view it as nearly 50% overvalued at $18.50. Short interest is another concern. The 26% short interest is a factor in the stock price run-up because of short-covering; investors should expect the shorts to reposition at higher levels and pressure the stock price until revenue and profitability are in sight. NuScale corporate partners include Fluor Corporation and Xcel Energy. 

Cameco Is a Good Investment Today

Cameco is the best investment today, producing revenue and positive cash flow and able to pay dividends. The company operates in three segments that make it a perfect play on today’s nuclear power generation industry and its evolution, including mining uranium, refining fuel and making fuel rods, and parts and services for reactors. The highlights from Q2 include debt reduction and improving cost metrics, compounded by improved guidance. Analysts rate this stock as a Buy and view it as undervalued, trading more than 10% below the consensus with shares near $55. The positive revision trend leads to the high-end range, good for another 2000 basis point share price increase. Short interest in this stock is less than 5%.