Shares of Cameco (CCJ 4.28%), Oklo (OKLO 7.51%), and Nano Nuclear Energy (NNE 5.55%) all rose today after a report from the International Energy Agency (IEA) was released. Cameco, up 4.4% as of 3 p.m. ET, was up as much as 5.8%. Oklo and Nano were up as much as 10.1% and 11.5%, respectively, before retreating, and are up 9.3% and 5.7% as of the time of writing. The upward movements come as the S&P 500 and the Nasdaq Composite gained 1% and 4.1%, respectively.
The future looks bright for Nuclear
“Nuclear” has been a bit of a dirty word for some time, but with recent safety improvements and in light of the massive energy demands of artificial intelligence (AI), nuclear power is having a moment. The IEA, an influential multinational policy organization, released a report that paints a rosy picture for the sector.
According to the report, nuclear power is set to reach a new record in 2025 “as electricity demand accelerates.” The energy source is making “a strong comeback” as attitudes shift. Although still viewed by some environmentalists as a non-starter, nuclear reactors produce no greenhouse gasses and produce enormous amounts of energy. The IEA notes, “nuclear energy is a leading source of clean and secure electricity generation — second only to hydropower” and that more than 40 countries around the world have plans to “expand nuclear’s role in their energy systems.”
The IEA report was a boon to nuclear stocks across the board, including Cameco, Oklo, and Nano.
Cameco is banking on strong uranium prices
Cameco is one of the largest uranium producers in the world. As the AI boom drives demand for energy production and more reactors come online Cameco will benefit from the increased demand for the fuel that powers these reactors. However, fluctuations in uranium prices can be somewhat unpredictable, and the company’s bottom line is impacted, leading to sometimes unsteady growth. The firm reported a drop in net income of 95% last quarter.
However, the long-term trends seem to be working in Cameco’s favor and the company remains one of the better ways to take advantage of a resurgence in nuclear energy.
Oklo wants your spent uranium
One threat to Cameco and uranium prices is upstart nuclear companies looking to make the system more sustainable. The Sam Altman-backed Oklo is developing small modular reactors (SMR) — reactors that, as the name implies, are much smaller than traditional plants — that run on used fuel from traditional reactors. The disruptive approach is designed to help power the power-hungry AI data centers popping up around the world.
The company is extremely promising but is in very early stages. This is a speculative play and should only be a part of your portfolio if you are particularly risk-tolerant.
Nano Nuclear is going even smaller
Nano is developing micro-reactors that are even smaller than what Oklo and other SMR players like NuScale are building. Where a traditional nuclear plant would deliver more than 1,000 megawatts of power, a NuScale or Oklo SMR will deliver an order of magnitude less. A Nano Nuclear reactor, however, will deliver just 20 megawatts. These micro-reactors are designed to be portable, and small enough to power a satellite.
Just like Oklo, Nano is in the very early stages of development and has a long way to go before it can prove capable of turning a profit. This is a stock for particularly risk-tolerant investors. Keep an eye out for key developments in the company’s technology and its ability to commercialize it. The road to success is littered with companies that couldn’t turn promising technology into cold, hard cash.
Johnny Rice has no position in any of the stocks mentioned. The Motley Fool recommends Cameco and NuScale Power. The Motley Fool has a disclosure policy.
