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These Nuclear Energy Stocks Are Exploding Because Big Tech Believes They Can Meet AI’s Power Demands

Updated: 26-10-2024, 04.11 PM

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AI’s emergence as “the next big thing” in technology has revolutionized how almost every industry does business. The only problem is AI’s unquenchable thirst for power has left Big Tech struggling to find an adequate fuel source. This power search has led many Big Tech outfits to partner with nuclear energy companies to create small modular reactors (SMRs). Those partnerships are creating tremendous investment opportunities in the energy sector.

Although oil and coal companies continue to provide the fuel necessary for global shipping and air travel, nuclear stocks like Constellation Energy and Vistra are surging on the strength of their potential to satisfy AI’s energy demands. Originally, nuclear power was seen as a potential replacement for fossil fuels, something it still has the potential to do.

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However, nuclear energy providers’ ability to build to scale and create SMRs, which are mini-nuclear plants that could power AI for Big Tech, is breathing new life into this energy industry sector. SMRs would produce renewable energy, giving Big Tech a fuel source that is not prone to supply disruption or price spikes due to global instability.

Constellation Energy shares have increased in value by over 100% this year. The surge is largely due to a deal Constellation made with Microsoft to provide it with nuclear power for the next 20 years. As part of that deal, Constellation will reopen the nuclear power plant at Pennsylvania’s Three Mile Island, which has been shuttered since a near meltdown in 1979. Ironically, this near disaster soured many Americans on nuclear energy.

Now, nuclear energy is enjoying a comeback. Of all the available renewable fuels, nuclear is one of the few that can generate enough power to fuel massive operations like electrical grids or the hyperscale data centers AI needs to reach its full potential. More importantly, nuclear energy now has the federal government’s support behind it.

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