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Wall Street JournalNuclear Stocks Surge as Another Big Tech Titan Goes Nuclear
Nuclear stocks are soaring as tech giants Alphabet (NASDAQ: GOOGL), Microsoft (NASDAQ: MSFT), and now Amazon (NASDAQ: AMZN) continue to invest big money in the development of advanced small modular reactors (SMRs) to meet the surging power demands of artificial intelligence (AI) data centers. In a world where data storage needs are growing at an exponential rate, nuclear power is emerging as a critical, carbon-free solution, propelling nuclear energy stocks into the spotlight.
On Wednesday, Amazon (NASDAQ: AMZN) Web Services (AWS) announced the signing of agreements to address its growing energy demands through the development of innovative SMRs. As a result, nuclear-related stocks, such as Oklo (NYSE: OKLO), NuScale Power (NYSE: SMR), and Nano Nuclear Energy (NASDAQ: NNE), saw their shares soar today. Amazon’s investment follows a broader trend of major technology companies turning to nuclear power to fuel their energy-hungry data centers as AI and cloud computing expand rapidly.
View Nano Nuclear Energy Interactive Stock Chart on Barchart
A Strategic Pivot by Amazon
Amazon’s interest in nuclear power is part of its larger strategy to achieve net-zero carbon emissions by 2040, a commitment under the company’s Climate Pledge. AWS, Amazon’s cloud computing arm, signed three agreements to support the development of SMRs, a new generation of nuclear reactors that promise scalable and carbon-free energy.
The tech giant has committed to building four SMRs in collaboration with Energy Northwest in Washington State, with an initial capacity of 320 megawatts (MW). The project could potentially expand to 960 MW, enough to power over 770,000 U.S. homes, while also supporting Amazon’s own energy needs. In addition, Amazon inked agreements to explore similar projects near Dominion Energy’s (NYSE: D) North Anna nuclear power station in Virginia.
Matt Garman, CEO of Amazon Web Services commented:
“Nuclear energy is a safe and scalable solution for the rising energy demands of our operations and customers. This investment aligns with our goals to transition to carbon-free energy sources and power our future sustainably.”
Tech Sector Embraces Nuclear Energy
Amazon’s move comes amid a growing recognition among tech companies of the potential of nuclear power. Earlier this week, Alphabet’s (NASDAQ: GOOGL) Google announced its own plans to purchase power from SMRs developed by Kairos Power, with reactors expected to come online by 2030. Microsoft (NASDAQ: MSFT), too, has committed to nuclear energy, partnering with Constellation Energy (NASDAQ: CEG) in a landmark deal to power its data centers with nuclear-generated electricity.
The shift to nuclear power is being driven by the skyrocketing energy demands of data centers, which are essential for storing and processing vast amounts of data generated by AI and cloud computing systems. A report by McKinsey & Co. projects that U.S. data centers’ energy consumption could triple by 2030, making clean and reliable energy sources more critical than ever.
David Arcaro, an analyst at Morgan Stanley noted:
“Nuclear energy is the only carbon-free power source that can consistently meet the growing electricity needs of our digital economy. The tech sector’s embrace of SMRs is a game changer.”
Nuclear Stocks Soar
Investors responded enthusiastically to the announcements, with nuclear energy stocks experiencing significant gains. Oklo, a fast-growing SMR developer backed by OpenAI CEO Sam Altman, saw its stock soar 41.97% today. Nano Nuclear Energy and NuScale Power also surged today, rising 37.85% and 40.01%, respectively.
Cameco (NYSE: CCJ) (TSX: CCO), one of the world’s largest uranium providers, also benefited from the nuclear frenzy, rising 7.87% today. The company supplies the nuclear fuel essential for SMRs and other reactors, positioning it well to capitalize on the tech industry’s pivot toward nuclear power. Cameco’s stock has gained 32% in 2024 alone, despite a temporary dip in August.
Analysts are increasingly bullish on the future of nuclear energy, projecting that the sector could see $1.5 trillion in investment by 2050. This potential is being driven not only by the energy needs of the tech sector but also by a growing political consensus around the importance of clean, reliable power.
Are SMRs the Future of Clean Energy?
Small modular reactors are widely viewed as a promising advancement in nuclear technology. Unlike traditional nuclear plants, which require on-site construction and face high costs, SMRs can be assembled in factories, reducing both expense and construction time. Additionally, SMRs have smaller footprints and are designed to be safer, with features that prevent meltdowns or radiation leaks.
However, critics remain skeptical about the economic viability of SMRs, pointing out that the technology is still in its infancy and costs remain high. Despite these concerns, the excitement surrounding SMRs is palpable, and the ongoing investments from tech giants could provide the momentum needed to bring this technology to market.
Cathie Wood, CEO of ARK Invest, which is heavily invested in Oklo, stated:
“We are seeing a nuclear renaissance. With continued innovation and support from major companies like Amazon and Google, nuclear energy is set to play a critical role in the clean energy transition.”
Path Ahead
While SMRs are still a few years away from widespread deployment, the recent flurry of investments underscores a growing belief that nuclear power, and SMRs in particular, will be a vital part of the world’s future energy mix. As tech companies continue to expand their operations, nuclear energy offers a reliable, scalable solution to the growing global demand for electricity.
With more tech giants expected to follow Amazon and Google’s lead, the outlook for nuclear energy stocks appears brighter than ever, marking a significant moment in the industry’s resurgence. Investors and energy experts alike will be watching closely as this new wave of nuclear innovation unfolds.
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Disclaimer: Wealthy VC does not hold a position in any of the stocks, ETFs or cryptocurrencies mentioned in this article.
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