How to Invest in the Nuclear Revolution

four nuclear reactors and electric power lines

(Image credit: Getty Images)

published 22 February 2025

The nuclear energy story – long in development – once more includes top-billed star power in President Donald Trump. Nuclear energy was already back in vogue, its renewed glow a function of the AI revolution, the electrification trend and the basic fact of global population growth.

But in his inaugural address on January 20, Trump declared a "national energy emergency," an assertion of executive power he can use to expedite infrastructure approvals.

And Energy Secretary Chris Wright further defined the president's role in his first Secretarial Order on February 6, holding that "the long-awaited American nuclear renaissance must launch" during this administration.

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The story also includes the Oracle of Omaha, Warren Buffett, whose Berkshire Hathaway (BRK.B) conglomerate now holds 100% of Berkshire Hathaway Energy, owner and operator of 360 megawatts (MW) of nuclear capacity.

That's not a lot compared to Constellation Energy (CEG), which owns and operates 21 nuclear reactors in the U.S. that generate a total of approximately 19,400 MW, enough to power nearly 20 million homes. But when Buffett speaks, like when Trump tweets, people pay attention.

And then there's the dramatic tension of global competition with China and Russia for constrained uranium supply as developed and developing nations (including India too) struggle to meet rising demand for electricity.

It's compelling. It's exciting. It's powerful. It's an international epic with (almost literally) only the fate of humanity at stake. It's also an open question, though, whether it makes sense.

Is now the time for nuclear energy? And what does a nuclear renaissance mean for investors?

Make the world a better place through nuclear energy

One advantage often cited by proponents of other sources of clean but intermittent energy, such as wind and solar, is nuclear's ability to support baseload generation.

Baseload generation is the minimum level of constant power supply a utility or electric grid must produce to meet continuous, consistent demand. The grid in the U.S. aggregates multiple sources of baseload generation, including natural gas combined cycle plants, coal-fired power plants, hydropower plants and geothermal plants as well as nuclear plants.

Advocates say nuclear balances fluctuations from wind and solar and helps maintain frequency and voltage levels.

Natural gas is now the No. 1 source of baseload generation, having surpassed coal amid the U.S. shale revolution. Nuclear energy accounts for approximately 18% of baseload generation. And though gigawatt-hours of nuclear generation will likely rise, its share is probably going to decline – no matter how hard the president and his people push a deregulation-inspired renaissance.

That's because of the primary disadvantage of nuclear energy: It costs a lot of money.

Nuclear energy realities

There may be lingering fear generated by Three Mile Island, Chernobyl and Fukushima as well as legitimate concern about the long-term storage problem presented by spent nuclear fuel. But the American people appear to favor the idea of a nuclear renaissance.

President Trump will confront a different sort of problem, though.

"There's no way presently to accurately project costs of a new nuclear reactor for investors and regulators," says legendary utility investor Roger Conrad. Small module reactors (SMRs) are a questionable solution: "You get less energy, and, if anything, the ability to project costs is far worse, as there are really only prototypes right now."

It's a different story for solar, wind and storage: Projects including combinations of infrastructure assets can be planned, sited, permitted, procured for, financed and built in 12 to 18 months. As Conrad notes, "You can therefore lock in costs."

That's not to say there is no role for nuclear energy. Restarts are happening – Three Mile Island will reopen in 2028 to power data centers under a September 2024 power purchase agreement between Microsoft (MSFT) and plant owner Constellation Energy.

Operators are extending licenses and upgrading existing facilities, and there are unlikely to be any more shutdowns any time soon.

"Despite the support of Big Tech, Biden and now Trump," Conrad observes, "we're seeing no new orders for big plants or SMRs." Decision-makers have the still-recent example of Southern Company's (SO) experience building two new reactors at its Vogtle facility, which ran over the planned budget by approximately $17 billion and over the construction deadline by about seven years.

Getting a lid on costs is the most important thing, "and relaxing permitting will only do so much," according to Conrad. "It may actually add costs if insurance rates rise in response. Trying to get new nuclear built is kind of swimming upstream despite the bipartisan support."

There is definitely interest. Dominion Resources (D) included preliminary discussion of SMRs in its most recent long-term supply plan, as have Duke Energy (DUK) and Entergy (ETR).

It is limited, though. CEO Bob Blue said during his company's fourth-quarter conference call that Dominion has no interest in reviving the construction of Westinghouse-built AP1000 reactors at the Sumner site in South Carolina it acquired along with SCANA in 2019.

Southern Company highlighted its success at Vogtle units 3 and 4 and is considering upgrades at units 1 and 2. But management has also been clear that it has no plans to build new nuclear capacity right now.

There is a serious path forward, one American Nuclear Society CEO Craig Piercy identifies with a look back: "America was once the dominant supplier of civil nuclear energy technologies to the world," Piercy writes in an open letter to Wright, "but we have allowed our supply chain to atrophy."

China leads in new builds, Piercy notes, and "Russia has the best 'zero money down' offer on a nuclear reactor in the world." According to Piercy, "Both nations have made civil nuclear exports a core pillar of their foreign policies."

He concludes that it's "time for the U.S. to do the same." Restoring commercial nuclear capability "will be worth it, for jobs, economic growth, and national security."

That all requires investment from the federal government.

Nuclear energy plays

Two basic themes define the universe of investable nuclear energy assets: uranium and generation. Uranium is the feedstock for thermal-neutron reactors used in electric power generation.

You can tie it all together with two stocks well-positioned to operate and grow amid existing constraints and an exchange-traded fund that holds both of them.

Canada-based Cameco (CCJ) is the second-largest publicly traded uranium company in the world. And Constellation Energy is far and away the largest operator of nuclear energy plants in the U.S. "They're basically unicorns," says Conrad of Cameco and Constellation.

CCJ has come back recently but over the trailing three years, the energy stock has outperformed the S&P 500 with a total return of 132% vs 47% for the index. CEG continues to surge, with the utility stock posting a year-to-date gain of 38% vs 4% for the S&P 500 and extending its trailing-12-month run to 136%.

Results for both companies continue to support performances of their respective stocks.

Cameco posted adjusted earnings per share of 36 Canadian cents, exceeding a consensus estimate of 32 cents, as revenue surged more than 40%. Its uranium production accounted for roughly 18% of the global total in 2024.

"Geopolitical uncertainty and heightened concerns about energy security, national security, and climate change continued to improve the demand and supply fundamentals for the nuclear power industry and the fuel cycle that is required to support it," Cameco said in its management's discussion and analysis statement.

"Increasingly," management notes, "countries and companies around the globe are recognizing the critical role nuclear power must play in providing carbon-free and secure baseload power." Cameco said that if implemented at 10% on Canadian energy products it doesn't expect a material impact on its 2025 results from new Trump administration tariffs.

BMO Capital Markets analyst Alexander Pearce expects a strong fourth quarter will lead to "a stronger 2025," with EBITDA growth of 26%. Pearce has an Outperform rating on CCJ with a 12-month price target of $84. Cameco remains one of Pearce's top stock picks in the metals and mining sector.

Constellation reported a fourth-quarter net profit of $852 million, reversing a year-ago loss of $36 million despite a 7% year-over-year revenue decline. Total operating expenses were down 23%. And management guided to 2025 earnings per share of $8.90 to $9.60, in line with a FactSet-compiled consensus of $9.20.

"Given recent commentary from major Tech firms," management noted in its earnings announcement, "we see less risk of a meaningful decline in electricity demand and investment in data centers, despite some lingering fears about the implications of the DeepSeek AI model." Constellation recently announced a $100 million investment plan for its Calvert Cliffs nuclear plant in Maryland.

"Wall Street hated Exelon's strategy of buying all those nuclear plants in the 1990s and 2000s – now people can't get enough of it," Conrad notes. Exelon (EXC) spun off CEG in 2022.

In a post-announcement note, energy analyst Daniel Rich of CFRA Research maintained his Buy rating on CEG but lowered his 12-month target price from $400 to $370. Rich reduced his 2025 earnings estimate but still prices in a premium for CEG "to reflect faster growth expectations" as well as "a favorable environment for nuclear and natural gas power generation."

The VanEck Uranium+Nuclear Energy ETF (NLR) has outperformed peers the Sprott Uranium Miners ETF (URNM) and the Global X Uranium ETF (URA) over the trailing 12 months, helped by its significant exposure to CEG, while CCJ has done well in support of its longer-term gains.

It's a concentrated fund with 28 holdings. CEG is tops at more than 10%, and CCJ represents more than 5% of assets. But NLR captures upside generated by strong operators and avoids more speculative and hyped-up risk.

David Dittman is the former managing editor and chief investment strategist of Utility Forecaster, which was named one of "10 investment newsletters to read besides Buffett's" in 2015. A graduate of the University of California, San Diego, and the Villanova University School of Law, and a former stockbroker, David has been working in financial media for more than 20 years.