Invest Alpha

Nuclear Energy

Macro Theme — Nuclear Energy

Theme Horizon: Multi-year (5–20 years)
Regime Type: Structural / Policy-Driven / Supply-Constrained

Core Thesis

• Global electricity demand is entering a structural upcycle driven by AI data centers, electrification (EVs, heat pumps), industrial reshoring, and grid hardening. Intermittent renewables alone cannot meet this demand reliably.

• Nuclear is the only proven, scalable source of baseload, carbon-free power capable of supporting 24/7 industrial and digital infrastructure at scale, making it strategically indispensable rather than optional.

• Policy and national-security priorities have shifted decisively in favor of nuclear, including reactor life extensions, SMR support, and domestic fuel-cycle independence.

• Supply is structurally constrained across the nuclear value chain, with long development timelines amplifying the impact of incremental demand.

• Public and political sentiment toward nuclear has inflected positively as energy security and grid reliability take precedence over lowest-cost generation.

What’s Different This Cycle

• AI and data centers introduce inelastic, high-reliability power demand
• Energy security now outweighs lowest-cost considerations
• SMRs enable incremental deployment, not just mega-projects

This cycle is structurally different from prior “nuclear renaissance” attempts.

Current Status

• The U.S. Department of Energy has approved approximately $5B of nuclear-related funding for FY2026, signaling growing policy support but also highlighting that the industry remains in an early stage of the build-out cycle.

• Construction costs for a single large nuclear reactor can approach ~$1B+, meaning current federal funding primarily acts as catalytic capital, not full project funding.

• The onus shifts to utility companies (e.g., NextEra Energy, Vistra) to:

  • Evaluate nuclear economics
  • Raise private capital
  • Apply for DOE loans and guarantees

• Given the large capex, regulatory complexity, and long asset lives, utility decision-making is likely to take on the order of a year or more before meaningful new build commitments are announced.

• Near-term progress is therefore expected to be measured and uneven, with early impact concentrated in:

  • Planning and permitting
  • Fuel-cycle investment
  • Life extensions and uprates of existing reactors

Potential Beneficiary Tickers (by Value Chain Layer)

1) Uranium Mining & Enrichment (Early-Cycle, High Torque)

• Cameco (CCJ)
• Kazatomprom (KAP / KZAP)
• Centrus Energy (LEU)
• Urenco (private)

Cycle role: Policy + supply scarcity leverage
Key risk: Commodity cyclicality, geopolitics

2) Reactor Designers & SMR Developers (Mid-Cycle Optionality)

• NuScale Power (SMR)
• GE Hitachi Nuclear Energy (via GE)
• Westinghouse Electric (private)

Cycle role: New-build and SMR optionality
Key risk: Execution delays, financing gaps

3) Utilities / Nuclear Operators (Late-Cycle, Lower Volatility)

• NextEra Energy (NEE)
• Vistra (VST)
• Duke Energy (DUK)
• Southern Company (SO)

Cycle role: Execution and cash-flow realization
Key risk: Regulatory approvals, rate recovery

4) Nuclear Services & Fuel-Cycle Infrastructure

• BWX Technologies (BWXT)
• Fluor (FLR)

Cycle role: Picks-and-shovels exposure
Key risk: Project execution

Key Risks

• Execution and cost-overrun risk
• Political and regulatory delays
• Financing risk due to capex intensity
• SMR commercialization delays
• Long-term substitution risk from storage or fusion

Invalidation / Re-Underwrite Triggers

Reassess the nuclear macro thesis if:

• Grid-scale storage becomes economically viable at multi-day duration
• AI/data-center power demand materially slows or decentralizes
• Governments reverse nuclear support or halt reactor life extensions
• Uranium supply expands faster than demand, compressing economics
• Multiple SMR designs fail to reach commercial scale