In the last month, three big tech companies, Microsoft, Alphabet, and Amazon, have all signed deals for nuclear energy. That’s not a coincidence. The AI race is forcing the tech giants to reckon with how to power the massive data centers they’re building to run AI applications like ChatGPT.
In fact, the biggest constraint in AI may not be the technology itself, but a source of cheap and available energy, and that’s why the world’s most valuable companies are turning to nuclear, a seemingly forgotten source of energy.
Among the backers of this re-emerging technology is Bill Gates, the Microsoft co-founder who has become an investor and philanthropist in a wide range of areas. Gates has invested more than $1 billion in TerraPower, a privately held start-up that is building small nuclear reactors. The billionaire sees nuclear energy as necessary for bridging the gap in renewable energy and told The New York Times, “If you care about climate, there are many, many locations around the world where nuclear has got to work.” He also said he’s not involved in TerraPower to make money, but “because we need to build a lot of these reactors.”
Since TerraPower is privately held, you can’t invest in it, but there’s a similar stock that you can buy. That’s NuScale Power (NYSE: SMR), and the stock is up more than 400% this year as it’s riding the wave of enthusiasm for nuclear power.
Image source: Getty Images.
NuScale was founded in 2007 and is focused on developing small, modular reactors. Its core technology, the NuScale Power Module (NPM) can generate 77 megawatts-electrical (MWe).
It’s developing the VOYGR power plant that can include as many as 12 NPMs. NuScale’s technology offers an advantage over renewable alternatives like wind and solar because it generates an equivalent amount of power in a much smaller space, making a more efficient use of land.
NuScale is also the only small modular reactor (SMR) company to have received a standard design approval (SDA) from the U.S. Nuclear Regulatory Commission.
NuScale also benefits from a close relationship with Fluor, a top engineering, procurement, and construction company that is the majority shareholder in NuScale Power.
The company has yet to generate any material revenue today as it has not yet sold any NPMs, though it’s made some negligible service revenue. NuScale faced a setback in 2023 when it canceled a project in Idaho that was expected to build momentum for new nuclear projects. The project was plagued by cost overruns and a lack of sufficient electricity buyers to make the project viable.
There’s no question that NuScale Power is a high-risk stock. After all, the company still isn’t generating material revenue, and there’s a lot of uncertainty around nuclear power in general.
Still, it’s clear that momentum is building rapidly in the sector as the moves of the big tech companies noted above show. Billionaires like Bill Gates are pouring money into the industry for a reason. Not only does nuclear offer a potentially large return, it also looks like the best available climate-friendly power solution to meet growing power needs from AI.
Additionally, NuScale’s relationship with Fluor gives it an advantage as Fluor is one of the biggest infrastructure companies and can help NuScale in a range of functions like development, finding customers, and funding.
After the recent rally, NuScale Power might look pricey at a market cap of $1.7 billion and no real revenue, but getting 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, getting a small amount of exposure to NuScale Power could pay off handsomely.
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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, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Jeremy Bowman has positions in Amazon. The Motley Fool has positions in and recommends Alphabet, Amazon, and Microsoft. The Motley Fool recommends NuScale Power and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
