A historic agreement on nuclear power was reached between the United States and the United Kingdom, and interest in the field is growing globally
James Mackreides examines ways to make money.
The benefits of nuclear power are one of the few things that US President Donald Trump and UK Prime Minister Keir Starmer agree on. A number of agreements to "accelerate the build-out of new nuclear-power stations and support billions in private investment into the technology" were the focal point of Trump's most recent state visit to the UK, according to Jean-Hugues de Lamaze, manager of Ecofin Global Utilities and Infrastructure Trust. Tancrede Fulop, a senior equity analyst at Morningstar, describes the emergence of AI as "a growth in energy consumption not seen for decades." They are not alone in their enthusiasm.
In recent years, the discussion surrounding energy policy has undergone significant change. "We've been discussing switching from a specific set of fossil fuels to cleaner technologies for the past 20 years," says Mobeen Tahir, director of research at WisdomTree. However, in recent years, we have realized that concurrently, we must "increase the amount of energy we produce to deal with the demands of the digital economy." The issue is that these two objectives appear to be at odds with one another. Despite being more environmentally friendly, renewable energy is less dependable than solar and wind power, which only produce electricity when the sun or wind is shining.
Conventional fossil fuels are polluting and contributing to climate change, but they provide electricity when needed. "The best of both worlds" is what nuclear power offers, "addressing the intermittency issues of renewables without compromising on the environmental credentials," according to Tahir. He contends that because nuclear power plants generate more energy per square foot, which also means that they require a lot less land, it is even possible to argue that nuclear power is more environmentally friendly than the majority of renewable energy sources.
In some ways, nuclear energy is also more cost-effective than the majority of fossil fuels. According to Canadian General Investments portfolio manager Greg Eckel, "it is probably the cheapest form of energy on an ongoing basis" once the reactor is operational, despite the significant fixed costs involved in construction. "Allowing other renewable sources of energy to just fill in the gaps" is the most likely scenario for the energy future, according to Eckel, in which nuclear power does the majority of the work.
Nuclear power and the energy-hungry Big Techs.
According to Tyler Rosenlicht, portfolio manager for global listed infrastructure at Cohen and Steers, the technology industry is especially in need of a clean, reliable power source because the AI revolution has resulted in an explosion in the number of power-hungry data centers. The centers also need a high level of dependability in addition to a significant amount of extra energy. Ultimately, if you are a technology executive, "the last thing you would want would be for your data centers to shut down suddenly because the power supply either begins fluctuating or cuts out."
As noted by Rosenlicht, the tech companies are so eager for the "tried and tested" energy that nuclear power can supply that they are doing business directly with nuclear-power companies rather than waiting for new plants to be constructed. The goal is occasionally to extend the lifespan of power plants that are about to expire. In other instances, tech firms have agreed to long-term contracts or made upfront payments to underwrite the cost of constructing new reactors. Both of these are crucial because one of the things preventing the technology from spreading more widely has always been the requirement to make a significant capital investment for an uncertain future.
Nearly all of the big businesses, including Amazon, Apple, and Meta, have at least some long-term agreements with nuclear power. Last year, Amazon and Alphabet, the parent company of Google, signed a number of agreements. This is not a one-way street either, as tech company Palantir has stated that it intends to apply its experience to create AI software that will speed up nuclear reactor development, "which is exactly the sort of support that we need to make the whole industry more efficient and exciting."
Constellation Energy's agreement with Microsoft to reopen Three Mile Island, which closed in 2019, is the most significant agreement between tech companies and nuclear utilities. It might be operational again as early as 2027 and supply power to Microsoft's data centers for the ensuing 20 years. It is significant because, in 1979, just 12 days after the release of the movie The China Syndrome, which is about a fictitious nuclear meltdown, Three Mile Island experienced a radiation leak. The public's perception of nuclear power became very negative as a result, according to Tahir. The reopening of Three Mile Islands could be a game-changing event.
The evolving perception of nuclear power.
Like the later Fukushima case, the impact of Three Mile Island was greatly exaggerated and is more prominent in the public consciousness than nuclear power's stellar safety record. The author of The Power of Nuclear: The Rise, Fall, and Return of Our Mightiest Energy Source, Marco Visscher, states that "the facts on the ground have always been on the side of the industry, but these facts have taken a long time to be accepted by the wider public." But now, he feels that the Ukrainian conflict and the failure of climate policy have made people and decision-makers more realistic.
Visscher cites polls that indicate "more people are in favor of nuclear power than oppose it across the world." According to polls, for instance, 57 percent of Americans now favor more nuclear power, up from 43 percent three years ago. Comparably, in just a few years, support for nuclear power has doubled in the Netherlands, while in Belgium, 85% of people now oppose the proposed decision to phase out nuclear power and prefer to keep it. The UK also has a high level of support for nuclear power, with three people in favor of it for every opponent.
Government policy is beginning to do the same. A number of European nations that "had historically been unfavorable to nuclear technology are now thinking about reversing this opposition," according to de Lamaze, in addition to the recent agreement between the US and the UK. He points out that in early 2025, the Italian Council of Ministers approved a draft law to bring back nuclear power, almost 40 years after it was declared illegal by a national vote in 1987.
Nuclear power restrictions are being lifted in many nations, according to Joachim Klement, head of Strategy at Panmure Liberum. The plants that were put on hold after the Fukushima accident are now beginning to reopen in Japan. It's possible that Germany will soon do the same. Chancellor Friedrich Merz is thinking of undoing Angela Merkel's notorious shutdown of Germany's nuclear industry and has agreed to permit nuclear power to be considered a renewable energy source on an EU level.
Klement adds that a lot of Asian nations are considering starting their own civil nuclear programs from the ground up. For instance, Malaysia and Indonesia are "hoping that nuclear power can help it fulfil its dreams of becoming Asia's data-centre hub," according to Klement. Malaysia has already entered into agreements to begin reactor development with foreign businesses. Already significant nuclear power investors, South Korea and India, are stepping up their efforts to boost output.
Small modular reactors' ascent.
The new technology of small modular reactors (SMRs) is generating a lot of hope. Klement explains that because of their small size, they typically have an output of 300400 MW, which is significantly less than the 3GW of a large reactor like Sizewell C. This implies that "you can locate them right next to an industrial park or major data center" and that the heat they produce can be used for other industrial applications. According to Fulop, they can also be operational considerably faster than a power plant, which can take up to ten years to construct.
According to Rosenlicht, the idea of a "tennis-court-sized nuclear reactor that is hooked up to a data center and feeding it clean, stable, predictable energy all day every day" has the potential to revolutionize the nuclear sector. He emphasizes that the underlying technology is unquestionably "viable," despite the fact that it may sound like science fiction. In fact, a type of SMR has been used to power nuclear submarines for many years.
Cost is the main unanswered question, even though the technology is viable, and SMRs are still "extremely expensive," according to Rosenlicht. However, the recent increase in SMR-related investment could start to make them more affordable, which would help address this issue. Between 2030 and 2035, Rosenlicht anticipates that SMRs will be able to compete with conventional reactors. This may seem longer than you might anticipate given some of the technology-related rhetoric, but "it's not that long when you consider that the increased demand from AI and other technologies is a long-term trend that is not going away."
Small modular reactors may, in fact, prove to be far less expensive than conventional reactors in the long run. Instead of needing to be assembled on-site, Klement says they could be built into a factory because of their small size, much like a jet engine is built into an airplane. He points out that prior experience in other sectors, like aerospace, indicates that "when the companies producing them learn from their mistakes, the cost to produce each additional SMR will quickly plummet, even though the first ones to be produced will be extremely expensive." After they are operational, SMRs may generate electricity at a third or less of the price of larger reactors.
Potential nuclear summer winners.
Who will benefit the most from this nuclear summer? Those who mine the uranium required to power these nuclear plants are probably the most obvious group of companies to gain. The current fleet of nuclear power plants needs about 180 million pounds of uranium in total, according to John Ciampaglia, CEO of Sprott Asset Management and partner with HANetf for the Sprott Uranium Miners UCITS exchange-traded fund. There are currently only 150 million pounds of uranium produced. Because the growth in the uranium supply has been slower than anticipated, we are still experiencing a shortage.
According to Ciampaglia, the current disparity between supply and demand may widen even more. Over the next 15 years, as nations "expand capacity through new builds, life extensions of shuttered plants, and restarts of shuttered facilities," the demand for uranium is predicted to nearly double to between 300 million and 350 million pounds worldwide. The misalignment means that uranium miners and the companies creating new mines are "well positioned" to get a good price for the uranium that they extract for some time to come, despite indications that investors are beginning to allocate more funds in an effort to close the gap.
Companies other than miners stand to benefit from the renewed interest in nuclear power. According to Tahir, the "nuclear value chain" as a whole will gain from this. "Midstream companies, which do things like converting raw uranium into something that can be used to carry out the nuclear reactions that produce energy" are included in this. Additional midstream responsibilities include nuclear reactor construction, storage, and services like maintenance, safety inspections, and even the decommissioning of plants that have outlived their useful lives.
However, the companies Tahir refers to as the "innovators"the businesses creating the new technologies that will revolutionize the nuclear supply chainare the sector that investors are most interested in. Even though many of them aren't making any money yet, Tahir believes that they "have a huge amount of potential growth ahead of them" and are therefore worth investing in. Other intriguing technologies include efforts to recycle the uranium used in the process (currently, only 5% of nuclear fuel is actually used in energy generation), in addition to the companies engaged in small modular reactors.
The top nuclear-related plays.
VanEck Uranium and Nuclear Technologies ETF (LSE: NUCL) is one exchange-traded fund that offers investments in the nuclear industry. This includes uranium miners, nuclear reactor design firms (large-scale and small modular reactors), and utilities, with the majority of the 25 companies based in the US, Canada, and Japan. Cameco and Oklo (see below) are among its biggest holdings, along with companies like exploration firm NexGen Energy and small modular reactor developer NuScale Power. On average, the fund's price/earnings ratio is 26 percent, and its total expense ratio (TER) is 0 percent.
The 35 uranium mining companies are the focus of the Sprott Uranium Miners ETF (LSE: URNM), as the name implies. It has a TER of 0.85 percent.
Globally, Cameco (Toronto: CCO) is the second-biggest uranium miner. Cameco "has learned to anticipate supply and demand and adjust production in light of how the market is evolving," which is especially impressive, according to Greg Eckel of Canadian General Investments. Additionally, he appreciates the company's expansion into other supply chain segments, such as its ownership of nearly half of Westinghouse, "which does the full cycle of designing, building, maintaining, and decommissioning nuclear reactors." Cameco's aggressive 55 times 2026 earnings is justified by the company's more than twofold revenue growth since 2021.
Oklo (NYSE: OKLO) is a more pure play on the advancement of cutting-edge nuclear technology. As mentioned in the main story above, WisdomTrees Mobeen Tahir has a soft spot for Oklo because it is a pioneer in the field of small modular reactor development. The first is scheduled for 2027. It is also figuring out how to recycle radioactive waste. Oklo is a marginally riskier investment because it is currently losing money, but it has enough cash on hand to last until it turns a profit in the upcoming years.
Rolls-Royce Holdings (LSE: RR) is another pioneer in the development of small modular reactors. Right now, the company's engines and defense products are its most well-known offerings. Over the next ten years, the UK government has chosen Rolls-Royce as one of its preferred partners to develop small modular nuclear reactors. Its recent quick turnaround and growth potential more than justify its 36-fold price premium over 2026 earnings.
Tancrede Fulop of Morningstar notes that few utilities focus exclusively on nuclear power. One such company is Korea Electric Power Corp (Seoul: 052690), which is well-known worldwide for its proficiency in generating electricity through the use of coal and gas. It also builds and designs nuclear power plants all over the world. It is responsible for plans to construct Japan's first new reactor since the Fukushima accident, in addition to projects in the US. Western investors can purchase it through depositary receipts traded on the New York Stock Exchange (NYSE: KEP) at a price below four times current earnings.
A little closer to home, Centrica (LSE: CNA) is another utility that Fulop enjoys. It currently derives about 20% of its operating profit from nuclear power, which includes a 15% interest in the Sizewell C nuclear power plant under construction in Suffolk. They have committed to investing in 12 new nuclear power plants that X-Energy is planning to construct in Hartlepool, so this should go up. Centrica has a 31.6 percent dividend yield and is trading at 114.4 times 2026 earnings.
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