这份协议令市场看到了清洁能源需求的巨大潜力，即The Three Mile Island agreement signed between microsoft and nvidia has directly exposed the huge potential demand for nuclear energy, causing nuclear energy concept stocks and uranium stocks to soar. Nuclear energy company Vistra still tops the S&P 500 large cap leaderboard, with a cumulative increase of over 209% so far this year, surpassing nvidia's 149.4% increase. Analysts predict that with the increase in demand for electrical utilities from data centers and other large energy consumers, nuclear energy demand may further increase.
$Microsoft (MSFT.US)$ The Three Mile Island agreement signed with Evergy puts the bullish demand for nuclear energy directly on the table, igniting a surge in nuclear energy concept stocks and uranium mining stocks sentiment.
On the previous Friday, September 20th, Microsoft and Evergy signed a 20-year power purchase agreement - the Three Mile Island agreement, because Microsoft needs a large amount of clean energy to meet the power needs of its ai datacenter. This may encourage optimization and expansion of the nuclear energy supply chain, including uranium mining, nuclear fuel processing, nuclear reactor construction, and maintenance.$Constellation Energy (CEG.US)$On the previous Friday, September 20th, Microsoft and Evergy signed a 20-year power purchase agreement - the Three Mile Island agreement, as Microsoft needs a large amount of clean energy to meet the power needs of its ai datacenter. This may inspire the optimization and expansion of the nuclear energy supply chain, including uranium mining, nuclear fuel processing, nuclear reactor construction, and maintenance.
This agreement shows the huge potential for clean energy demand in the market, as the demand for nuclear energy, as a stable and low-carbon energy choice, may continue to grow with the increase in power demand from data centers and other large energy consumers.
After the agreement was announced on Friday, September 20th, nuclear energy concept stocks surged. Constellation Energy's stock price rose by 22.29% that day, marking the largest single-day gain in history. Other stocks in the industry also rose, with another nuclear energy Corp, Vistra, experiencing a 16.60% surge in stock price that day. As of Wednesday's closing, it remains the top performer in the s&p 500 large cap index, up over 209% year-to-date, surpassing Nvidia's 149.4% increase.
Uranium mining stocks have also successfully reversed the downturn this year. Before reaching a nuclear agreement with Microsoft, the largest uranium producer in North America$Cameco (CCJ.US)$saw its stock price decline for the whole year. After reaching the agreement, as of the Wednesday's closing, the stock has risen over 10.4% year-to-date, with an accumulated increase of about 91% in 2023. Another uranium producer$Denison Mines (DNN.US)$also erased all declines for the year and has accumulated an increase of over 6.2%.
In a phone interview, Global X analyst Kenny Zhu emphasized:
"Just a year ago, the power consumption revolution related to ai had not even appeared. The 'reputation' of Microsoft and Three Mile Island helps investors to correctly view the potential upside in this field."
Investors are currently closely watching the next potential trading opportunities. In addition to the already skyrocketing stocks, Wall Street analysts believe there is upward potential for other American utility stocks. Guggenheim analyst Shahriar Pourreza once predicted:
We believe the United States will have many datacenter capitals.$Ameren (AEE.US)$ Corp.,$American Electric Power (AEP.US)$,$Duke Energy (DUK.US)$,$Entergy (ETR.US)$,$Evergy (EVRG.US)$,$Exelon (EXC.US)$And.$FirstEnergy (FE.US)$Utility companies like this are considered "the most reasonably valued relative to their potential upside."
Analysts believe that uranium mining stocks will continue to rise, with the growth in uranium demand potentially accelerating further. Data shows that in recent years, uranium demand has grown at an annual rate of about 4%, higher than most of the time between 2010 and 2020, which was 1%. KeyBanc analyst Sophie Karp wrote that Microsoft's power purchase agreements "serve as a significant catalyst to showcase the value of nuclear energy in the AI era." She mentioned that this momentum in the utility sector can continue.
Chief Investment Officer of Sachem Cove Partners Michael Alkin predicts that with the increasing demand for electricity from data centers and AI technologies, as well as the reactivation of some shut down nuclear power plants, the demand for uranium could further accelerate. Analyst Zhu from Global X stated that as these utility companies purchase nuclear fuel, uranium mining companies may benefit in the long term.
Editor/Rocky
