Big Tech Is Driving A Nuclear Energy Renaissance

Jinjoo Lee had a fascinating and important column in Friday’s WSJ about how Big Tech – thirsty for energy to fuel its data centers for AI – is driving a nuclear renaissance (“Big Tech Is Paving The Way For A Nuclear Breakthrough” [SUBSCRIPTION REQUIRED]). While the focus of her article is small modular reactors (SMRs), I’m bullish on nuclear as a whole because of its environmental friendliness and space efficiency.

Nuclear is the most enviromentally friendly in terms of lowest emissions and space efficient in terms of generation per acre – and it’s not close (see Jinjoo Lee’s article for the charts that prove it). Nuclear has a bad reputation because of some well known accidents but with the need for energy growing exponentially it is a big part of the solution going forward. And Big Tech knows it as these companies are investing significant money in nuclear power generation.

The biggest player in nuclear is $23 billion Cameco (CCJ) – which reports 3Q24 earnings Thursday morning. CCJ expects to produce 22.4 million pounds of Uranium in 2024 resulting in revenue of $2.85-$3.00 billion. As you can see in the chart above, the stock has been a stellar performer.

Another way to play nuclear for generalists is the Global X Uranium ETF (URA). While it has underperformed CCJ – and CCJ makes up nearly a quarter of its assets – it gives you broader exposure to nuclear stocks. For instance, 2.74% of URA is invested in NuScale Power (SMR), a small moduclar reactor pioneer that Jinjoo Lee discusses in her article and which is up more than 500% YTD.

Nuclear energy is a big part of the clean and efficient energy solution we need for an increasingly energy intensive future. Despite the nice moves these stocks have made recently, we are in the very early innings of a big long term move.

Note: To get up to speed on energy and electricity – including nuclear – I highly recomend Robert Bryce’s superb book A Question of Power: Electricity And The Wealth Of Nations.

Disclosure: Top Gun is long shares of CCJ and URA.