SA Asks: What’s the most attractive nuclear energy stock right now?

As global demand for energy intensifies amid the proliferation of power-hungry technologies like AI, nuclear energy has been getting a second look.

We asked Seeking Alpha analysts Ricardo Fernandez and Laura Starks which nuclear energy stock they viewed as most attractive right now for investors.

Ricardo Fernandez: Nuclear energy capacity expansion has a long runway; the supply chain from engineering, equipment and uranium, such as Cameco (NYSE:CCJ), Oklo (NYSE:OKLO) and BWX (NYSE:BWXT), all should see demand and pricing power gains, but this may be three to five years away, in my view.

The near-term winners are nuclear independent power producers Constellation (NASDAQ:CEG), Vistra (NYSE:VST) and Talen (NASDAQ:TLN) which have significant nuclear power energy to sell into respective grids and purchase power agreements with hyperscalers that, in combination, can drive revenue and cash flow far higher than the regulated electric utility.

Talen (NASDAQ:TLN) stands out due to its higher percentage of uncontracted capacity that may result in outsized earnings gains. The near-term demand for electricity has three primary drivers – climate change, electrification or decarbonization, and data centers – which could more than double annual electricity growth rates to the 4%-5% level that current capacity cannot easily meet, potentially leading to price spikes.

Laura Starks: I’m generally a fan of utilities that have large (and active) nuclear in their generation portfolios. While it’s seen a tremendous run-up, independent power producer Constellation Energy (NASDAQ:CEG) is one I have kept an eye on since its inception. I own shares.

I think large and small, existing and new-build nuclear will find a long-term place in electricity generation, assuming the growth in demand from AI data centers continues as expected.

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