The energy and tech sectors, mega-cap technology companies like Amazon, Microsoft, and Alphabet are betting big on nuclear power. As the demand for clean energy rises and the soaring power needs of artificial intelligence (AI) data centers become critical, these tech behemoths are striking nuclear energy deals to fuel their expansion.

This wave of investment has invigorated the nuclear power industry, leading to a renaissance on Wall Street where stocks tied to nuclear energy have skyrocketed. The specific investments made by Amazon and Microsoft, and the impact on nuclear-focused stocks, which have posted record-breaking gains in 2024.

The Demand for Clean Energy and AI’s Soaring Power Needs

The rise of AI and its integration into everything from cloud computing to logistics and healthcare has driven unprecedented demand for reliable and sustainable power sources. Data centers, the backbone of AI infrastructure, consume enormous amounts of energy to process, store, and manage data. Estimates show that the world’s data centers alone already consume approximately 1% of global electricity, a figure expected to double over the next decade as AI grows in influence.

Tech companies find themselves at a crossroads, balancing sustainability pledges with a need for vast, uninterrupted power. Nuclear energy is increasingly viewed as an ideal solution. Carbon-free, highly efficient, and scalable, nuclear energy can meet the high demands of AI data centers without contributing to carbon emissions.

Amazon and Microsoft Lead the Nuclear Charge

Amazon and Microsoft have set themselves apart by embracing nuclear power in ways previously unseen among tech giants.

• Amazon’s Investments in Modular Nuclear Reactors
  Amazon has poured $500 million into a financing round for a company specializing in Small Modular Reactors (SMRs). Unlike traditional reactors, SMRs are smaller, more flexible, and can be placed closer to energy grids. This could mean faster, less disruptive deployment, providing Amazon with a reliable and scalable energy source. In March 2024, Amazon further solidified its nuclear ambitions by purchasing a nuclear-powered data center for $650 million, indicating its commitment to powering its massive data requirements with nuclear energy.

Matt Garman, CEO of Amazon Web Services (AWS), highlighted the strategic alignment between nuclear energy and Amazon’s environmental goals. “One of the fastest ways to address climate change is by transitioning our society to carbon-free energy sources, and nuclear energy is both carbon-free and able to scale—which is why it’s an important area of investment for Amazon,” Garman said in a recent press release. Amazon’s investment in SMRs not only positions it as a leader in sustainable energy adoption but also strengthens its infrastructure as a top cloud provider.

• Microsoft’s Deal with Three Mile Island
  Microsoft has also taken a bold step by signing a 20-year power purchase agreement to buy electricity from a utility that plans to restart the Three Mile Island nuclear plant. Located on Pennsylvania’s Susquehanna River, Three Mile Island was the site of the United States’ worst nuclear accident in 1979. The plant’s partial shutdown in 2019 seemed to mark the end of its operations; however, Microsoft’s agreement has brought it back to life.

This partnership signifies a remarkable shift toward revitalizing dormant nuclear assets, with nuclear energy offering Microsoft a steady stream of carbon-free power for its data centers. The significance of this agreement cannot be overstated. Microsoft’s data center energy needs are immense, and its commitment to buying nuclear power helps ensure a long-term, stable, and renewable energy source. Such a deal reinforces the company’s status as a major player in both the tech and energy sectors.

Wall Street’s Nuclear Renaissance: A Look at Soaring Stocks

The recent nuclear power surge has sent stock prices of nuclear-focused companies soaring, with investors seeing these tech-backed moves as a vote of confidence in the industry. In turn, utility companies, uranium miners, and small-scale nuclear developers have reaped major rewards. Let’s look at some of the stocks that have seen explosive growth this year:

• Cameco Corporation
  Market Value: $23.6 billion
  YTD Performance: +25%

Cameco, a major uranium producer, has seen steady gains as nuclear power’s popularity grows. With uranium essential to nuclear energy production, Cameco is well-positioned to benefit from rising demand for fuel. The company has been strategically increasing production to meet anticipated global needs.

• BWX Technologies
  Market Value: $11.3 billion
  YTD Performance: +62%

Known for its work on advanced reactors and nuclear components, BWX Technologies has capitalized on the interest in nuclear power technologies like SMRs. BWX’s expertise in modular reactors aligns with tech companies’ goals, making it a key player in this energy transition.

• Oklo
  Market Value: $2.4 billion
  YTD Performance: +88%

Oklo, a Silicon Valley-based nuclear energy startup, specializes in developing compact, waste-recycling reactors. Oklo’s technology holds significant promise for producing clean energy from nuclear waste, a feature that appeals to environmentally conscious tech companies.

• Constellation Energy
  Market Value: $83.5 billion
  YTD Performance: +128%

Constellation Energy, which operates several large-scale nuclear plants across the United States, has more than doubled in value this year. The company’s long-term contracts and partnerships with tech giants provide a stable revenue stream that reflects positively on its stock value.

• Vistra Corp.
  Market Value: $43.0 billion
  YTD Performance: +224%

Vistra Corp. has positioned itself as an energy transition leader, and its involvement in nuclear projects has bolstered its stock performance. With a diverse energy portfolio and ambitious carbon-reduction targets, Vistra’s strategic embrace of nuclear energy has been rewarded by investors.

• Nano Nuclear Energy
  Market Value: $589.6 million
  YTD Performance: +272%

A relatively new player in the nuclear market, Nano Nuclear Energy focuses on microreactors. The company’s small size and ambitious plans to provide modular, mobile nuclear reactors have captured the attention of investors who see high potential in these cutting-edge, adaptable technologies.

• NuScale Power
  Market Value: $1.8 billion
  YTD Performance: +481%

NuScale Power, a pioneer in SMR technology, has seen explosive growth, driven by agreements with utility companies and tech corporations. NuScale’s reactors are designed to be more adaptable and can be deployed in a range of environments, offering flexibility that traditional reactors cannot match.

 A Nuclear Power Revival

The renewed interest in nuclear power brings broad implications, particularly as energy challenges mount worldwide. Several factors underlie the resurgence:

• Energy Independence and Security
  As countries seek alternatives to fossil fuels, nuclear energy offers a reliable source that reduces reliance on foreign oil and gas imports. For tech companies, securing energy stability means less vulnerability to market fluctuations and geopolitical tensions.
• Environmental Commitments and Carbon Neutrality
  With nuclear energy producing minimal carbon emissions, it is a natural ally in the fight against climate change. Nuclear’s scalability also allows tech companies to make meaningful progress toward their sustainability goals while meeting the massive power requirements of their AI operations.
• Technological Advancements in Nuclear Power
  Technologies such as SMRs and microreactors are transforming nuclear energy, making it safer, more flexible, and cheaper to deploy. These advancements enable a more tailored approach to power generation, reducing the cost and risk of building traditional reactors.
• Investment Opportunities for Tech and Energy Companies Alike
  As companies diversify their energy portfolios, investments in nuclear power open up new revenue streams. This trend has also revitalized related industries, from uranium mining to advanced reactor design, broadening investment opportunities across the board.
• Policy Shifts and Federal Support
  Many countries, including the U.S., are reevaluating their stance on nuclear energy. Federal incentives and policy shifts aimed at reducing carbon emissions have encouraged utilities and private companies to pursue nuclear options. For example, the U.S. government has recently allocated funding for next-generation nuclear research and development, reflecting a pro-nuclear stance.

The Future of Nuclear Energy in Tech

As the demand for clean, reliable energy grows, nuclear power is increasingly positioned as a viable solution. Tech giants’ investments serve as a substantial endorsement for nuclear energy and set a precedent for its application in the digital economy. Analysts believe that the sustained interest from Amazon, Microsoft, and other corporations could signal the start of long-term partnerships between the tech and nuclear sectors, with potential ramifications for global energy dynamics.

CFRA analyst Arun Sundaram recently noted the strategic alignment between nuclear energy and the goals of the technology industry. “With the full power of AI dependent on both data centers and energy infrastructure, these investments further help Amazon secure its positioning as a leading cloud/AI provider,” Sundaram remarked. Sundaram’s comment underscores the strategic importance of nuclear energy to the future of tech—a future where AI and clean energy intersect seamlessly.

With advancements in nuclear technology promising reduced costs, increased safety, and minimized environmental impact, nuclear energy’s role in the tech-driven future seems all but assured. As the nuclear renaissance unfolds, Wall Street’s enthusiasm could continue, bringing new opportunities and challenges to the ever-evolving landscape of energy and technology.