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Nuclear energy, once shunned, is primed to transform into the powerhouse of the global energy transition. Investors are slowly grasping nuclear energy's ability to reshape the world and Wall Street. The transformational nature of nuclear energy and its booming growth potential has it being mentioned in the same breath as artificial intelligence. And it is not just because nuclear energy companies are landing deals with AI firms to power the energy-intensive industry. Outside of two AI plays, the best-performing S&P 500 stock in 2024 is a nuclear energy company—its shares have climbed 60% YTD and 250% since its early 2022 IPO. Meanwhile, upstarts in the U.S. are racing to become the stars of the next generation of high-tech nuclear reactors. There have also been potentially game-changing nuclear fusion breakthroughs over the past several years. The buildout of a nuclear-powered economy will cost tens of trillions of dollars and take decades to accomplish. The sheer costs and the timeline mean investors still have the opportunity to get in near the ground floor of nuclear energy through uranium miners, nuclear power plant operators, visionary upstarts, and beyond. Mounting U.S. and Global Support Nuclear energy's ability to provide continuous, carbon-free power means it must play a gigantic role in the growing global economy if fossil fuel use is to be reduced. Still, nuclear energy needed the powers that be to start reversing a generation of neglect by providing the financial and regulatory runway needed for nuclear to flourish. After decades of nuclear energy stagnation, key players across powerful governments, finance, technology, and heavy industry have finally thrown their collective might behind creating a new nuclear power age. The U.S. first highlighted its commitment to reignite and expand nuclear energy by supporting current nuclear power plants and providing incentives to build new reactors and pursue advanced nuclear technologies within the Inflation Reduction Act in 2022. The IRA put nuclear on a level playing field with other clean energy sources. The U.S. then co-led in December 2023 a coalition of countries across four continents that pledged to triple nuclear energy capacity by 2050. At the end of March, officials from 30 countries came together in Brussels at the inaugural Nuclear Energy Summit to dive into the financing, technology, and infrastructure needed to create a nuclear energy-driven future. "Today I can assure you that nuclear is coming back, and coming back strongly," the Executive Director of the International Energy Agency Fatih Birol said at the first-ever Nuclear Energy Summit. Continued . . . | ||||
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| An Industry Reborn Nuclear energy provided 50% of America's carbon-free electricity in 2023, making it the largest domestic source of clean energy. Nuclear power plants operated at full capacity roughly 92% of the time in 2023, making them the most reliable energy source, according to the U.S. Energy Department. Nuclear was about 1.5X to 2X more reliable than natural gas and roughly 2.5X to 3.5X times more dependable than wind and solar. Yet, the first new U.S. nuclear reactor built from scratch in decades didn't start sending power to the grid until last summer. Many other U.S. nuclear plants are being retrofitted and kept running instead of being shuttered—which was the plan until only a few years ago. Better still, 60 new nuclear reactors are under construction around the world, according to the International Atomic Energy Agency. Another 110 nuclear reactors are planned to start construction soon, many in places that have never had nuclear power. Nuclear energy investments increased by 400% between 2015 and 2022, according to Pitchbook. A large chunk of that expansion came during the last few years. Investors now have the chance to follow the venture capitalists and Wall Street titans into a growing pile of nuclear energy investments. Nuclear Energy Sectors and Stocks There are multiple ways to invest in nuclear energy, from uranium miners to upstarts attempting to usher in a new era of nuclear power. Some of the world's biggest names in technology, from Bill Gates to Sam Altman of OpenAI and ChatGPT fame, are throwing their weight and capital behind nuclear startups. One of the exciting areas gaining momentum is small modular reactors or SMRs. Physicists and engineers are focused on downsizing and mass-producing nuclear power plants. Over 100 commercial SMR designs are being developed around the world. Multiple public companies are working on small modular nuclear reactors. One is a giant of industry that has been in business for over a century, while another is a plucky upstart that went public in 2022. Separately, dozens of companies are making meaningful strides in nuclear fusion. Fusion, or melding atoms, is the same process that powers the sun and stars. Fusion could generate four times more energy per kilogram of fuel than fission. Long thought to be only theoretically possible, the first controlled fusion reaction that produced more energy than it consumed was achieved in late 2022. Companies able to produce sustained fusion power could become the superstars of energy and possibly all of Wall Street. Uranium is the most commonly used fuel for nuclear power plants today. The rapid revival of nuclear power sent uranium prices to their highest levels in over 15 years, soaring from $25 in 2019 to $100 in early 2024. A decade of falling prices before the rally and the prior lack of governmental support crippled U.S. uranium mining. Thankfully, the nuclear revival has encouraged companies to start investing heavily in uranium mining, conversion, and enrichment. The U.S. government is also supporting the local uranium industry because Russia supplies around 14% of global uranium concentrates, 27% of conversion, and 39% of enrichment. Furthermore, next-generation SMRs require a different type of uranium enrichment. A publicly traded U.S. company in the fourth quarter of 2023 made its first delivery of this type of uranium to the U.S. Department of Energy. There are plenty of other avenues to invest in nuclear energy and the opportunities are growing almost weekly. How to Capitalize on The Nuclear Stock Surge As previously stated, nuclear energy stocks were among the best performing stocks in 2023. There are plenty of reasons to believe that breakout will continue in 2024 and for years to come. The demand for clean energy is growing fast. The U.S. and other wealthy nations have committed to pouring huge amounts of money into nuclear energy production. And groundbreaking new technologies are beginning to make the impossible possible. Even controlled fusion as a reliable power source is on the horizon. Now is an ideal time for investors to find out more about the leading stocks in this space. I recently released an urgent special report to help you do exactly that. In How the Rise of Nuclear Energy Can Power Your Portfolio, you'll discover 7 of today's hottest nuclear stocks. Four of them are actively developing the next generation of nuclear energy technology: small modular reactors and controlled fusion. You're invited to download this report for just $1. When you request the report, you'll also receive 30-day access to my Alternative Energy Innovators portfolio. You'll see all the real-time buys and sells of the nuclear stocks on my watch list, plus the hottest stocks in the other nontraditional energy verticals: solar, wind power, batteries, hydrogen fuel cells, and more. On Monday morning, I'll be adding a brand-new pick with outstanding profit potential to the portfolio. You can be among the first to see it. Alternative Energy Innovators is usually closed to the public. In fact, we haven't opened it to new members since July 2023. The portfolio is closing again on Sunday, March 31, so I encourage you to look into this right away. See Our Top Energy Stocks Now » Good investing,
Ben Rains – Stock Strategist and Editor of Alternative Energy Innovators | ||||
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