Key Points

SpaceX valuation depends on the success of its AI division.
AI infrastructure depends heavily on new energy sources.
10 stocks we like better than Oklo

The SpaceX IPO has now concluded. Spending plans are set to begin. What will the company direct its fresh IPO funds toward? The prospectus makes the focus clear: artificial intelligence.

The filing states the company has spotted the largest actionable market opportunity ever seen. It places the total addressable market at 28.5 trillion dollars. Over 90 percent of that figure relates to AI alone. As a result, SpaceX long-term prospects rest largely on scaling its AI operations.

One major hurdle stands out: limited new energy supply. AI systems need data centers that consume large amounts of power. Growth in the sector will require substantial new energy capacity to come online. The prospectus notes that energy supply faces global constraints because of rising demand and limited availability for AI compute needs.

Over the longer term SpaceX appears to favor orbital data centers that would draw power from the sun. Yet many experts question whether such facilities will reach commercial scale and when that might occur.

Until then AI firms including SpaceX must depend on ground-based power. Wind and solar will contribute but a newer nuclear approach may also draw attention from large AI operators.

These two nuclear energy stocks could support SpaceX and other AI firms

Major technology companies already show fresh interest in nuclear power for reliable baseload electricity with lower emissions. Alphabet for instance participates in building and upgrading several nuclear sites.

Standard nuclear plants take many years to complete often a decade or longer. Small modular reactors or SMRs offer a faster path. A Bank of America report notes that SMRs use less land require shorter build times and include improved safety features. The report adds that SMR advances could reshape nuclear supply chains over the next decade.

Several firms worldwide are developing SMR technology. Some remain private while others form part of larger industrial groups making targeted bets difficult.

Two pure-play SMR companies stand out for investors focused on AI and nuclear energy: NuScale Power and Oklo. NuScale targets utility partnerships for large grid projects while Oklo aims to sell directly to data center operators. Oklo counts Sam Altman among its early backers.

Neither firm has yet brought an SMR to commercial operation. Both hold pipelines of potential customers yet the shift from plans to delivered power is uncertain. Cost advantages appear on paper but it remains unclear whether AI leaders will commit fully to the still-novel systems.

Bank of America analysts note that SMR economics involve complexity. Supporters cite modular design benefits while critics highlight cost overruns in early projects. Renewables such as solar and wind continue to improve on cost which may affect SMR appeal.

Investors eyeing SMR stocks like NuScale and Oklo should adopt a long-term view and accept higher risk for the chance of greater returns.

Should you buy stock in Oklo right now?

Before purchasing Oklo shares review this information.

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Bank of America serves as an advertising partner of Motley Fool Money. The author holds no positions in the mentioned stocks. The Motley Fool maintains positions in and recommends Alphabet and recommends NuScale Power. A disclosure policy applies.

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