Nuclear Power: The Future Backbone for AI’s Energy Demand

Artificial intelligence (AI) is transforming various sectors and accelerating technological growth like never before. However, this rapid expansion requires a tremendous amount of energy. Data centers, essential for AI operations, consume vast quantities of electricity for complex computations and to maintain optimal cooling for their systems.

Power Challenges Ahead for AI Data Centers

The increasing demand for energy from these data centers is putting immense pressure on conventional power sources. According to a recent Gartner report, 40% of existing AI and GenAI data centers will face operational constraints due to power shortages by 2027, which could hinder their growth and disrupt energy supply.

Nuclear Energy: A Sustainable Solution

In light of this energy crisis, nuclear power emerges as a vital solution for a reliable and sustainable energy source. Unlike conventional power sources, nuclear energy can provide continuous electricity with minimal carbon emissions, making it suitable for the rising energy needs of AI.

Why Tech Giants Are Going Nuclear

Why are technology leaders choosing nuclear power at this time? The answer lies in the advantages of advanced nuclear solutions: faster deployment, reduced costs, and a cleaner energy future. By investing in nuclear technology, these companies are not only supporting AI development but also advancing toward a greener energy grid.

Top Stocks Embracing Nuclear Energy for AI Needs

We have identified four key stocks — Amazon (AMZN), Alphabet (GOOGL), Microsoft (MSFT), and Meta Platforms (META) — that are leading the charge in adopting nuclear energy by 2025.

Amazon (AMZN)

Amazon ranks #2 (Buy) on Zacks and employs cutting-edge technologies like machine learning and data analytics to improve its services in e-commerce and cloud computing. Through Amazon Web Services (AWS), the company delivers advanced AI solutions worldwide.

To mitigate the rising energy needs for its AI platform, Amazon plans to invest in Small Modular Reactors (SMRs). In partnership with Energy Northwest in Washington, Amazon aims to build four SMRs that can produce up to 960 MW of clean energy, enough for over 770,000 homes. Additionally, the company is backing X-energy, specializing in next-generation SMR technology.

Amazon also collaborates with Dominion Energy in Virginia and Talen Energy in Pennsylvania to ensure its data centers run on nuclear energy, emphasizing a commitment to a reliable energy future.

The Zacks Consensus Estimate for Amazon’s 2024 earnings has increased by 2 cents to $5.19 per share over the past month. Year-to-date, AMZN shares have risen by 46.9%.

Amazon.com, Inc. Price and Consensus

Amazon.com, Inc. price-consensus-chart | Amazon.com, Inc. Quote

Alphabet (GOOGL)

Alphabet, rated #3 (Hold), is at the forefront of AI innovation, with advances ranging from AI-driven search engines to sophisticated machine-learning models. With expanding AI demands, ensuring reliable energy sources for its data centers has become a priority for the company.

Recently, Alphabet announced a partnership with nuclear startup Kairos Power to secure 500 megawatts of electricity from several SMRs by 2025. This strategic move integrates nuclear energy as a clean and scalable option for powering its AI operations.

The Zacks Consensus Estimate for Alphabet’s 2024 earnings remains stable at $8.02 per share, and GOOGL shares have increased by 35% year to date.

Alphabet Inc. Price and Consensus

Alphabet Inc. price-consensus-chart | Alphabet Inc. Quote

Microsoft (MSFT)

Microsoft, also rated #3 (Hold), leads in AI advancements, notably in voice recognition and natural language understanding. Their AI models are shaping industry standards.

In late 2024, Microsoft entered a 20-year agreement with Constellation Energy to revitalize the Three Mile Island nuclear facility in Pennsylvania. This $1.6 billion investment aims to restart the reactor, generating carbon-free electricity for Microsoft’s growing data centers.

The Zacks Consensus Estimate for Microsoft’s fiscal 2025 earnings has remained steady at $12.93 per share. Year-to-date, MSFT shares have appreciated by 16.3%.

Microsoft Corporation Price and Consensus

Microsoft Corporation price-consensus-chart | Microsoft Corporation Quote

Meta Platforms (META)

Meta Platforms, granted a #3 (Hold) rating, leverages AI technologies to enhance user experiences across Facebook, Instagram, and WhatsApp. With substantial energy needs for its data centers, Meta is now pursuing nuclear energy solutions.

Meta has announced plans to issue a Request for Proposals (RFP) aimed at finding nuclear energy developers capable of generating 1-4 gigawatts of new capacity in the U.S. starting in the early 2030s. By collaborating with energy developers to build nuclear facilities, Meta seeks to diversify its power supply while continuing to innovate in AI.

The Zacks Consensus Estimate for Meta’s 2024 earnings increased by 0.4% to $22.68 per share over the past month, and META shares have risen 68.2% year to date.

Meta Platforms, Inc. Price and Consensus

Meta Platforms, Inc. price-consensus-chart | Meta Platforms, Inc. Quote

Zacks Unveils Top 10 Stocks for 2025

Want to learn about our top 10 stock picks for 2025? Experience has shown that their historical performance has been impressive.

Since 2012, under the guidance of our Director of Research Sheraz Mian, the Zacks Top 10 Stocks portfolio has earned +2,112.6%, outpacing the S&P 500’s +475.6%. Currently, Sheraz is combing through 4,400 companies to select the best 10 stocks to buy and hold for 2025. Ensure you don’t miss these stocks when they’re revealed on January 2.

Want the latest recommendations from Zacks Investment Research? Today, you can download 5 Stocks Set to Double. Click to get this free report.

Amazon.com, Inc. (AMZN): Free Stock Analysis Report

Microsoft Corporation (MSFT): Free Stock Analysis Report

Alphabet Inc. (GOOGL): Free Stock Analysis Report

Meta Platforms, Inc. (META): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.