The nuclear energy sector, invigorated by Amazon’s recent investments, experienced a roller coaster ride this week. NuScale Power Corporation (SMR), a major player in Small Modular Reactors (SMRs), saw its stock surge on Wednesday after Amazon Web Services (AWS) announced a multi-million dollar commitment to nuclear power development. However, the stock has since retreated, dropping over 5% on Thursday as investors digest the news and potentially lock in some of their recent gains.
Amazon’s decision to invest in nuclear power is a significant development, underscoring the increasing recognition of this energy source as a clean and reliable alternative. The tech giant has signed agreements to support multiple SMR projects, including a deal with Energy Northwest for four SMRs generating up to 960 MW and a partnership with Dominion Energy to explore additional projects in Virginia.
Amazon’s investment comes as the Biden administration pours billions into clean energy production, recognizing nuclear energy’s potential to combat climate change. U.S. Energy Secretary Jennifer Granholm recently announced an additional $900 million in funding for SMR deployment. While these developments are encouraging, it’s worth noting that the first SMRs are not expected to be operational until between 2030 and 2035.
NuScale Power Corporation is not the only company benefiting from this renewed interest in nuclear energy. Other players in the sector, such as Oklo Inc., Nano Nuclear Energy Inc., and Lightbridge Corp., have also seen their stock prices rise following Amazon’s announcement. The sector is attracting interest from other tech giants as well, with Alphabet Inc. announcing its support for the construction of seven SMRs from startup Kairos Power.
This surge in investment highlights the potential of the nuclear sector. Investors will closely monitor the development of these SMR projects as the market reacts to the influx of support and funding from major tech companies. While NuScale’s stock has taken a dip, Craig-Hallum analyst Eric Stine maintains a Buy rating on the company and raised the price target from $16 to $21. Over the past year, SMR stock has gained over 220%. Investors looking to gain exposure to this growing sector can explore the Themes Uranium & Nuclear ETF (URAN).
The recent developments suggest a strong future for the nuclear energy sector, but it is important to approach any investment decisions with caution and conduct thorough research.