Key Points

AI growth is accelerating plans for power-hungry data centers across the globe.
Nuclear power stands out as a strong option to satisfy the sector's expanding electricity requirements.
10 stocks we like better than NuScale Power

Investment banks along with multiple research groups are highlighting the potential of nuclear power.

After years of limited spending, a mix of major tech advances, rising global rivalries, and demand for clean, compact, steady electricity is setting the stage for a nuclear revival, according to a recent Goldman Sachs analysis.

Nuclear power has essentially been rediscovered because of booming electricity needs, according to Bank of America. It delivers steady base-load supply, a reduced carbon impact, and strong energy output relative to investment when compared with alternatives.

Morgan Stanley analysts share this view. Nuclear generation is seeing renewed interest fueled by climate targets and tech requirements. Following more than ten years of contraction, the sector is rebounding and may create openings throughout the nuclear supply chain.

Image source: Getty Images

Citigroup analysts are also aligned. Nuclear remains one of the biggest low-carbon electricity sources and is ready for worldwide expansion driven by new technologies, net-zero targets, and the value of clean power options, per one of its latest reports.

Citigroup shows particular interest in small modular reactors, or SMRs. These function as compact nuclear facilities that are simpler and quicker to construct, require less upfront capital, and can sit alongside other infrastructure thanks to their smaller size. Applications for SMRs are advancing, with the United States emerging as a prime location for reliable base-load generation, the bank notes.

Investors seeking exposure to growing nuclear demand, especially early SMR development, will find the two stocks below well suited.

These two stocks focus on nuclear power and SMR technology

One of the most direct routes for investors to tap SMR momentum today runs through NuScale Power (NYSE: SMR) and Oklo (NYSE: OKLO). Both firms are deeply committed to commercializing SMR designs, yet they pursue distinct strategies.

Oklo maintains the closest tie to AI-driven energy demand. Sam Altman, CEO of OpenAI, backed the company early and chaired it for several years. The connection makes sense given OpenAI's need for fresh power sources. Oklo units can sit next to data-center sites and supply clean, dependable electricity that operates for years without refueling.

The firm holds a 14 GW pipeline heavy with large technology and data-center customers. Still, Oklo has not yet secured U.S. Nuclear Regulatory Commission approval for its designs and has never brought an SMR to commercial operation.

NuScale follows a different path by marketing its systems to utilities. It has reached an agreement to develop a 6 GW project for the Tennessee Valley Authority. Although NuScale holds regulatory clearance for the installation, the effort would mark the company's first completed build. A firm power-purchase agreement remains unsigned, leaving some doubt about final execution.

Rising AI use is clearly increasing demand for additional energy supplies. That requirement is expected to last for decades, and nuclear fits well. Although less established, SMR designs appear ideal for adding dependable, low-carbon capacity rapidly. Numerous obstacles remain, including regulatory sign-off and actual construction across each company's customer backlog.

Both NuScale and Oklo trade with market values below 10 billion dollars following a sharp pullback. Bank of America places the worldwide nuclear market at 10 trillion dollars over the coming decades. SMRs will represent only a portion of that total. Even so, both companies could see meaningful gains if their expansion plans unfold as expected.

Significant risks exist. Nevertheless, Oklo and NuScale offer compelling choices for investors comfortable with volatility who want exposure to both AI expansion and an emerging nuclear approach.

Should you buy stock in NuScale Power right now?

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Ryan Vanzo holds no positions in any stocks mentioned. The Motley Fool recommends NuScale Power. The Motley Fool maintains a disclosure policy.

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