Trump Signs Executive Order to Revitalize U.S. Nuclear Energy Sector
President Trump has signed an executive order designed to enhance the U.S. nuclear energy industry. The order intends to reform the Nuclear Regulatory Commission and accelerate the development of new nuclear reactors. These changes could stimulate growth in the sector.
Stocks Positioned for Growth in Nuclear Energy
NuScale Power (NYSE: SMR), Constellation Energy (NASDAQ: CEG), and Cameco (NYSE: CCJ) are identified as key nuclear energy stocks that may benefit from this revitalization.
NuScale Power’s Potential with Small Modular Reactors
Reuben Gregg Brewer notes that NuScale Power’s stock rose sharply following the executive order. Although the company has not yet commercialized its product, investor interest pushes its stock to all-time highs.
NuScale aims to produce small modular reactors (SMRs) that are less expensive and easier to construct than traditional large reactors. These reactors can be factory-built and transported closer to where energy is needed, featuring modern safety measures to minimize risks.
If NuScale can finalize sales of its SMRs, it stands to gain significantly as nuclear demand rises. A crucial point will be in 2025 when Romanian firm RoPower decides whether to purchase six SMRs, a deal that could ease future negotiations.
Constellation Energy’s Strong Position in Nuclear Production
Matt DiLallo highlights that Constellation Energy leads U.S. nuclear power generation, holding 22.1 gigawatts (GWs) of capacity—four times that of its nearest competitor, Vistra, at 6.3 GWs.
Instead of serving end customers, Constellation sells its output to utilities and large corporations under long-term power purchase agreements. This approach allows the company to take advantage of higher market rates.
Recently, Constellation partnered with Microsoft to restart its Three Mile Island Unit 1 plant, which had been shuttered. The tech giant signed a 20-year power contract set to begin in 2028. Furthermore, Constellation is exploring additional nuclear growth opportunities, including investment in SMRs.
Alongside its nuclear initiatives, Constellation is expanding into cleaner energy sources, planning to acquire Calpine, a leader in natural gas and geothermal energy. These efforts position the company for robust earnings growth, projected at over 13% annually through 2030, with the potential for even faster growth following the Calpine deal.
Exploring Uranium Investment with Cameco
Neha Chamaria notes that Trump’s push to boost nuclear capacity could also increase demand for uranium, essential for powering nuclear plants. Cameco, a key uranium producer, is seen as a sound investment as nuclear projects expand.
Cameco has remained optimistic about the uranium market even before Trump’s executive order, anticipating benefits as more reactors become operational.
Cameco’s Outlook Highlights Global Uranium Supply Concerns
In May, Cameco indicated that roughly 70% of the projected uranium fuel needs for nuclear reactors worldwide through 2045 remain unmet. This translates to approximately 3.2 billion pounds of uranium required for upcoming reactors. For context, utilities contracted only about 119 million pounds of uranium for 2024 under long-term agreements.
Cameco, a leading uranium producer, is a key player in the uranium and nuclear energy sectors. The company is already seeing an increase in long-term uranium contracting activity. Additionally, Cameco holds a 49% stake in Westinghouse Electric, which provides essential nuclear technologies, equipment, and services, giving it a competitive advantage over other uranium producers.
Financially, Cameco has a strong track record, as it has paid dividends annually since 1991, increasing them by 33% last year. Given these factors, Cameco appears to be a solid investment in the nuclear sector.
Financial Considerations for NuScale Power Investment
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Matt DiLallo, Neha Chamaria, and Reuben Gregg Brewer have no position in the mentioned stocks. The Motley Fool has positions in and recommends Constellation Energy and Microsoft, as well as Cameco and NuScale Power.
The views expressed here are those of the author and do not necessarily reflect those of Nasdaq, Inc.
