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Buy 5 Nuclear Energy Stocks to Tap Huge AI-Powered Data Center Growth
BWXTBWX Technologies(BWXT) ZACKS·2025-01-24 20:01

AI Infrastructure and Investment - President Donald Trump unveiled a joint venture called "Stargate" with OpenAI, Oracle Corp, and Softbank to create AI infrastructure, including data centers in the United States, with an initial investment of 100billion,potentiallyreaching100 billion, potentially reaching 500 billion in the next four years [1] - Microsoft plans to invest 80billionin2025intoAI−enableddatacenterstotrainAImodelsanddeployAIandcloud−basedapplications[3]−BloombergIntelligenceestimatesgenerativeAIspendingwillincreasefrom80 billion in 2025 into AI-enabled data centers to train AI models and deploy AI and cloud-based applications [3] - Bloomberg Intelligence estimates generative AI spending will increase from 67 billion in 2023 to 1.3trillionby2032,withUBSpredictinga33.51.3 trillion by 2032, with UBS predicting a 33.5% year-over-year increase in capital expenditure on AI applications by four U.S. technology giants in 2025 [5] Nuclear Energy and Data Centers - The energy-hungry AI space has made nuclear energy one of the hottest industries on Wall Street, with companies like Microsoft, Alphabet, Meta, and Amazon collaborating with nuclear energy producers to meet the massive electricity demand for data centers [2][4] - Rystad Energy predicts that the combined expansion of traditional and AI-driven data centers, along with chip foundries, will increase U.S. electric power demand by 177 TWh from 2023 to 2030, reaching a total of 307 TWh [6] - The U.S. Department of Energy reported that data center energy usage will "double or triple by 2028," after doubling over the past decade [6] Nuclear Energy Stocks - Constellation Energy Corp (CEG) is a leading U.S. energy company focusing on clean energy, particularly nuclear energy, with a 5.1 billion capital expenditure plan through 2025 to acquire nuclear fuel and increase inventory levels [8] - BWX Technologies Inc (BWXT) manufactures and sells nuclear components, with expected revenue and earnings growth rates of 9.9% and 5.9%, respectively, for the current year [11][12] - Dominion Energy Inc (D) is realigning its portfolio to focus on regulated assets, aiming for net-zero carbon and methane emissions by 2050, with expected revenue and earnings growth rates of 9.5% and 22.7%, respectively, for the current year [15][17] - Talen Energy Corp (TLN) is an independent power producer operating nuclear, fossil, solar, and coal power plants, with an expected revenue growth rate of 18.6% for the current year [18][19] - PG&E Corp (PCG) generates electricity using nuclear, hydroelectric, fossil fuel-fired, fuel cell, and photovoltaic sources, with expected revenue and earnings growth rates of 5.5% and 9.4%, respectively, for the current year [21][23] Strategic Partnerships and Agreements - Microsoft entered into a 20-year agreement with Constellation Energy to revive the Three Mile Island nuclear plant in Pennsylvania, with a $1.6 billion investment to provide carbon-free electricity for Microsoft's data centers [9] - Dominion Energy signed an MOU with Amazon to explore innovative development structures for enhancing potential Small Modular Reactor (SMR) nuclear development in Virginia [16] - Amazon has partnered with Talen Energy in Pennsylvania to power its data centers with nuclear energy [18]