According to the Securities Times app, as various American technology giants have signed nuclear power agreements to meet the electricity demand for artificial intelligence, the nuclear energy industry has once again entered the investors' field of vision, and analysts have also started to anticipate the optimistic prospects of the industry.

Is nuclear energy making a comeback?

Nuclear power plants continue to reopen, but the first question the market faces is whether the global supply can meet the increasing demand for clean energy. On October 1st, Aniket Shah, the global head of sustainable development and transformational global strategy at Jefferies, discussed his position on the resurgence of nuclear energy in the artificial intelligence boom.

Shah shared that the prosperity of nuclear energy is not surprising. Looking back, the United States signed important partnerships many years ago to increase nuclear energy supply, indicating that the value of the industry is not unknown or recent.

He added that large tech companies will be the main catalysts and will impact the entire market. These companies will invest hundreds of millions or even billions of dollars in the nuclear energy field, making it easier for other companies to follow suit. Shah mentioned that some key investment areas will be small modular reactors and nuclear fusion.

Google (GOOGL.US) recently stated that they will purchase electricity from a series of small nuclear reactors (SMRs) produced by the nuclear energy startup Kairos Power. Meanwhile, other tech giants including Microsoft (MSFT.US) and Amazon (AMZN.US) have already placed their bets on nuclear energy, with Microsoft agreeing to buy power from the Three Mile Island nuclear power plant in Pennsylvania that has closed, and Amazon recently purchasing a nuclear-powered datacenter in Pennsylvania.

Shah also acknowledges that both parties in the USA have a consistent view on the prosperity of nuclear energy, which explains why regulations and bills favorable to nuclear energy can swiftly pass. However, despite the infrastructure for nuclear energy being assembled, Shah remains concerned about the implementation. He emphasizes that the USA does not have enough skilled labor and resources to make nuclear energy prosper a reality and must work very hard to achieve this goal.

Nuclear energy is expected to experience growth in the AI boom.

In 2024, one of the most opportunistic investment themes is artificial intelligence, while another is electrification, both of which require a significant amount of electrical utilities. The surge in electricity demand in turn drives up utility stocks. On October 4th, Director and General Manager of Evercore ISI, Durgesh Chopra discussed in an interview how utility companies can benefit from the AI-driven electricity demand.

Chopra emphasizes that for companies like Vistra Energy (VST.US) and Constellation Energy (CEG.US), the biggest catalyst is the datacenter's demand for around-the-clock clean energy. Therefore, nuclear power companies must seize the opportunity to quickly sign long-term contracts to secure future growth.

Currently, there are multiple projects in preparation in the USA, totaling approximately 1.5 GW of energy, positioning nuclear power plants as the next big event in the energy sector. On the other hand, balancing supply and demand will be a key challenge faced by enterprises.

Despite facing many challenges, Chopra believes that the utility market is ready for growth. Utilities have not experienced demand growth in the past decade, but the industry's situation has finally changed. Overall, with the decline in inflation rates, this industry may experience significant bullish trends. Chopra also emphasizes that the industry's growth will yield results within five to seven years.