US nuclear stocks are rallying...AI, quantum new technologies are essential for 'power'

 Nuclear power stocks are leading the market as the era of U.S.-centered “energy supremacy” is expected to accelerate under Trump's second term. Nuclear power plant companies, small modular reactors (SMRs) and uranium mining companies have been rallying since Trump's inauguration.


                                      Three Mile Island Nuclear Power Plant, Pennsylvania, USA

According to the financial investment industry, U.S. nuclear power stocks have extended their gains after U.S. President Donald Trump declared a “national energy emergency,” according to the Financial Times on Jan. 26.

The president said that he would treat nuclear energy on par with oil, coal, and natural gas, and emphasized that national energy independence is linked to national security, drawing attention to related stocks as he signaled all-out support.

Constellation Energy (CEG), the No. 1 operator of nuclear power in the U.S. and considered a “nuclear powerhouse,” is up 8.64% over the past five trading days as of Sept. 24 (local time). In particular, the stock has risen 51% in a month since the end of last year, reflecting expectations of Trump's second term nuclear policy.

Vistra Energy (VST), a US independent power producer and key competitor to Constellation Energy, is also up 13.36% in five trading days.

SMR-related companies have also continued to surge. NewScale Power (SMR) is up 32.56% and Oklo (OKLO) is up 67.08% in five trading days.

The key policies announced in the first week of Trump's second term have all centered on increasing investment in AI infrastructure in the power industry. The strategy is to partner with big tech to speed up the development of AI, quantum, and other technologies to solidify technological hegemony. It is also driven by the fear of losing out in the US-China AI war.

Therefore, a stable supply of electricity to run AI has emerged as the most important agenda.

“The Trump administration has revoked former President Biden's executive order regulating the AI industry, declared a national energy emergency, and announced 'Stargate,' a mega AI infrastructure project,” said DS Investment & Securities, ”suggesting that the focus of the Trump administration's policy drive at the beginning of his term is on AI infrastructure power projects.”

The nuclear power sector has already been labeled as a key sector since early last year that will gain momentum regardless of the outcome of the election. In fact, the sector was promoted from the first Trump administration to the Biden administration, and is now seen as a priority sector to support the second Trump administration's energy policy.

U.S. Secretary of Energy Chris Wright has also stated since his nomination that he will “expand energy production, including commercial nuclear power and liquefied natural gas (LNG).”

In the fourth quarter of last year, the Biden administration laid out a roadmap for building new nuclear power plants, restarting reactors, and upgrading existing facilities to increase nuclear power capacity from 100.6 gigawatts (GW) in 2023 to 300 GW by 2050.

For now, however, it is more realistic to invest in SMRs rather than large new nuclear power plants. This is because SMRs cost one-fifth as much to build as large nuclear power plants and can be brought online more quickly due to shorter construction times.

Meanwhile, exchange traded funds (ETFs) that invest in companies that mine uranium, the raw material for nuclear power, are also on the rise.

The Defiance Daily Target 2X Long Uranium (URAX) is up 27.99% this year. URAX's underlying, Global X Uranium (URA), is up 14% in January alone.

URA invests in companies involved in the uranium minerals industry, including uranium mining companies. Cameco, Canada's largest uranium exploration, development, mining, and refining company, holds a 25% weighting. Last year, Cameco increased uranium production by 33.5% year-over-year and is looking to expand production at its other mines by more than a third this year.

Sprout Junior Uranium Miners (URNJ), which invests in small and mid-sized companies that mine and develop uranium, is also up 14% in a month.


Resource : Maeil Economy, Jan. 26, 2025

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