In the past month, three major technology companies, Microsoft, AlphabetAnd Amazonhave all signed nuclear energy agreements. That’s no coincidence. The AI race is forcing the tech giants to think about how to power the massive data centers they are building to run AI applications like ChatGPT.
In fact, AI’s biggest limitation may not be the technology itself, but a source of cheap and available energy. That’s why the world’s most valuable companies are turning to nuclear power, a seemingly forgotten energy source.
Among the backers of this reemerging technology is Bill Gates, the co-founder of Microsoft, who has become an investor and philanthropist in a wide range of fields. Gates has invested more than $1 billion in TerraPower, a private startup that builds small nuclear reactors. The billionaire sees nuclear energy as necessary to bridge the gap in renewable energy and said The New York Times“If you care about the climate, there are many, many locations in the world where nuclear energy needs to work.” He also said he is not involved in TerraPower to make money, but “because we need to build a lot of these reactors.”
Because TerraPower is privately held, you can’t invest in it, but there is a similar stock you can buy. That is NuScale power (NYSE: SMR)and the stock is up more than 400% this year as it rides the wave of enthusiasm for nuclear power.
NuScale was founded in 2007 and focuses on the development of small, modular reactors. The core technology, the NuScale Power Module (NPM), can generate 77 megawatts of electricity (MWe).
It is developing the VOYGR power plant that can supply as many as 12 NPMs. NuScale’s technology offers an advantage over renewable alternatives such as wind and solar energy because it generates an equivalent amount of power in a much smaller space, making more efficient use of land.
NuScale is also the only small modular reactor (SMR) company to receive Standard Design Approval (SDA) from the U.S. Nuclear Regulatory Commission.
NuScale also benefits from a close relationship with Fluorinea leading engineering, procurement and construction company that is the majority shareholder of NuScale Power.
The company has not yet generated any material revenue today as it has not yet sold any NPMs, although it has generated negligible service revenue. NuScale suffered a setback in 2023 when it canceled a project in Idaho that was expected to create momentum for new nuclear projects. The project was plagued by cost overruns and a lack of enough electricity buyers to make the project viable.
There’s no doubt that NuScale Power is a high-risk stock. After all, the company is still not generating any material revenue, and there is a lot of uncertainty surrounding nuclear energy in general.
Still, it’s clear that momentum in the sector is growing rapidly, as evidenced by the moves of the big tech companies mentioned above. Billionaires like Bill Gates don’t put money into the industry for nothing. Not only does nuclear energy offer potentially high returns, it also appears to be the best available climate-friendly energy solution to meet AI’s growing energy needs.
Additionally, NuScale’s relationship with Fluor gives the company an advantage, as Fluor is one of the largest infrastructure companies and can assist NuScale with a range of functions such as development, customer sourcing and financing.
After the recent rally, NuScale Power may seem pricey with a market cap of $1.7 billion and no real revenue, but some exposure to the stock could pay off.
Nuclear energy seems likely to play a role in the future of AI, and NuScale Power is well positioned as a leader in SMRs. For patient, risk-tolerant investors, gaining a small exposure to NuScale Power could be worthwhile.
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, a director at Alphabet, is a member of The Motley Fool’s board of directors. Jeremy Bowman has positions at Amazon. The Motley Fool holds positions in and recommends Alphabet, Amazon and Microsoft. The Motley Fool recommends NuScale Power and recommends the following options: long calls in January 2026 for $395 at Microsoft and short calls in January 2026 for $405 at Microsoft. The Motley Fool has a disclosure policy.
Bill Gates is investing billions in nuclear energy. Is this the best nuclear stock to buy right now? was originally published by The Motley Fool
