With the rapid rise of artificial intelligence, nuclear energy is ushering in new development opportunities. Analysts pointed out that industrial pump and valve manufacturer Flowserve (FLS.US) not only has significant business potential in the nuclear energy sector, but may also become a dark horse for investors to unexpectedly profit from the wave of artificial intelligence. Although Flowserve's nuclear energy business accounts for only 3%-4% of total sales, its profit margin is above average, providing strong support for future profit growth. With the increasing demand for clean nuclear power from tech giants, this stock may see unexpected upward potential. As artificial intelligence computing develops rapidly, nuclear energy is experiencing a renaissance. There is now a new way to participate in this trend.

Tech giants are hoping to obtain clean and uninterrupted nuclear power to provide power for their energy-demanding artificial intelligence data centers. These efforts have led to some stocks skyrocketing, while causing fluctuations in the technology, utilities, and industrial sectors.

According to data from Bank of America, investors are looking for a new nuclear power investment opportunity to support the artificial intelligence industry.

Analyst Andrew Obin stated on Tuesday that industrial pump and valve manufacturer Flowserve is a hidden nuclear power investment opportunity. He pointed out that the company's nuclear-related business is "most important" within its coverage.

Flowserve produces a large number of pumps, seals, and valves, appearing in almost every industrial operation, including power generation.

Obin stated that the nuclear energy business accounts for only 3% to 4% of total sales. However, the growth of this segment of business has not been reflected in Wall Street's estimates or investor expectations. In addition, Obin also mentioned that the profit margin of the nuclear energy business is above average. Both these factors together suggest that profits in the coming years may exceed expectations.

The trading price of Flowserve's stocks is approximately 16 times the expected earnings for 2025, while the Standard & Poor's 500 Index trades at close to 21 times.

UBS has given flowserve stocks a 'buy' rating, and set a target price of $60.

According to FactSet data, 64% of analysts covering flowserve stocks have a 'buy' rating. The average 'buy' rating for stocks in the S&P 500 index is approximately 55%. Analysts' average target price for flowserve stocks is slightly below $57.

In Tuesday's trading, flowserve's stock rose by 7.2% to close at $52.14, while the S&P 500 index rose by 0.3%, and the Dow Jones Industrial Average rose by 0.2%.

UBS's research report was issued after learning last Friday of Microsoft (MSFT.O) partnering with Constellation Energy (CEG.O) to restart the Three Mile Island nuclear power plant. In March, Amazon (AMZN.O) reached an agreement with Talen Energy (TLN.O) to sell nuclear power to the tech giant.

As of Tuesday's trading, Talen's stock has risen by about 190% this year. Constellation Energy's stock has risen by approximately 117%. Independent power producer Vistra Energy (VST.N) has also seen a nearly 200% increase in its stock. Vistra also operates nuclear power plants.

In addition to power producers, many other stocks are benefiting from the trend of artificial intelligence. Data center infrastructure provider Vertiv Holdings (VRT.N) saw its stock rise by about 103% this year. GE Vernova LLC's (GEV.N) stock has risen over 100% from its level when it split from GE's aviation division on April 2.

Of course, there is also Nvidia (NVDA.O), which manufactures most of the chips that power computers for artificial intelligence. Its stock has risen by about 144% this year.

By 2024, flowserve's stock has also risen by 26%. However, with investors expecting higher growth from unexpected sources, more gains may still lie ahead.