Constellation Energy to Restart Nuclear Reactor for AI Data Centers

The recent report outlines Constellation Energy's plans to restart a nuclear reactor, with electricity intended to power Microsoft-managed AI data centers. The move highlights the increasing energy demands from tech giants, potentially affecting stock prices in related sectors.

Date: 20-10-2024

AI Rating: 7

The report discusses Constellation Energy's plans to restart a nuclear reactor to meet the rising electricity demand, particularly from AI data centers operated by Microsoft. This is significant as it reflects the urgent need for more sustainable energy sources amidst growing electricity consumption.

The restart of the 800-megawatt reactor at Pennsylvania's Three Mile Island emphasizes the role that nuclear power can play in supporting AI technologies. Notably, the impending demand for power from data centers is projected to increase 160% by 2030, as per Goldman Sachs, underlining the urgency for arrangements like this reactor's restart.

The talk of small modular reactors (SMRs) also presents an attractive investment opportunity, with companies like Alphabet and Amazon expressing interest in purchasing electricity generated by them for their data centers. The analysis mentions an estimated annual growth rate of 30% for the SMR market, reaching over $72 billion by 2033. This rapid growth could positively influence the stocks of companies branching into this space, such as NuScale Power.

The mention of uranium consumption increasing by nearly 3% per year until 2035 presents an opportunity for uranium-focused companies and investors, especially since demand is expected to outpace supply leading to price increases. Cameco, a leading supplier of high-grade uranium, is singled out as a strong candidate, having turned $339 million into net income last year.

While the approval process for NuScale's larger SMR design remains a point of concern, the clear direction towards nuclear energy solutions for data centers indicates a shift that could benefit several related companies in the energy and technology sector.

Stocks: CCJ NNE OKLO SMR