CEG, OKLO, and SMR Get Set to Power the AI Boom via Nuclear Energy

Business Insider

17 hours ago

The nuclear energy sector is experiencing a resurgence unseen in decades, driven largely by its potential to power the burgeoning AI revolution. Major technology companies such as Meta (META), Microsoft (MSFT), and Alphabet (GOOGL) are competing to secure reliable energy sources for their expanding data centers, and nuclear power's clean, consistent output has positioned it as a key player in this race.
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Leading this revival are three companies—Constellation Energy (CEG), Oklo (OKLO), and NuScale Power (SMR) —each bringing a distinct approach to the nuclear landscape. Over the past year, all three have outperformed the market, capturing investor attention amid rising energy demand.
Constellation Energy (NASDAQ:CEG) | The Nuclear Titan Locking in Tech Giants
Constellation Energy is the 800-pound gorilla of U.S. nuclear power, and it's just landed a deal that's got everyone's attention. Just two days ago, CEG signed a 20-year power purchase agreement with Meta to deliver 1.1 gigawatts from its Clinton Clean Energy Center in Illinois, starting in 2027. This isn't an ordinary contract, but rather a lifeline for a plant that was on the verge of closure when its zero-emissions credits expire. The deal, which also boosts Clinton's output by 30 megawatts, underscores CEG's ability to secure tech giants. Microsoft is already on board with a Three Mile Island restart.
What makes CEG a one-of-a-kind destination for tech titans is its scale. With 94 reactors across the U.S., they're a one-stop shop for tech companies chasing net-zero goals while powering AI workloads. Their shift away from co-located data center plans to grid-connected projects, as noted in last month's update, indicates they're adapting to regulatory hurdles, such as FERC's rejection of expanded co-location deals.
Moreover, the Meta deal demonstrates that CEG can pivot and still secure massive contracts. Sure, their stock's run-up makes it a bit daunting to be bullish on today, but with AI data centers projected to eat up 9% of U.S. electricity by 2030, CEG's infrastructure could be a cash cow in waiting.
Is Constellation Energy Stock a Good Buy?
Currently, most analysts are bullish on CEG stock. The stock features a Moderate Buy consensus rating based on eight Buy and five Hold ratings assigned in the past three months. No analyst rates the stock a sell. CEG's average stock price target of $319.45 implies ~10% upside over the next twelve months, despite shares having already rallied 30% year-to-date.
Oklo (NYSE:OKLO) | The Startup with a Nuclear Vision
Oklo, the newest entrant in the nuclear energy space and backed by OpenAI's Sam Altman, is focused on small modular reactors (SMRs)—compact, flexible power plants ideally suited for data centers. The company's stock has surged 440% over the past year, fueled by high-profile agreements such as its December deal with Switch to supply 12 gigawatts through 2044. Additionally, a recent memorandum with Korea Hydro & Nuclear Power to advance their 75-megawatt Aurora Powerhouse fast reactor has further accelerated momentum.
While Oklo remains pre-revenue and is currently investing heavily in technology development, with commercial operations still several years away, its 'power-as-a-service' model—where the company builds, owns, and operates reactors—could revolutionize how data centers secure reliable power without significant upfront costs. Recent executive orders easing nuclear regulations have also provided a regulatory boost.
However, significant risks remain, including ongoing R&D challenges and the high costs of scaling production. For investors who believe SMRs are key to powering the AI revolution, Oklo's long-term vision holds considerable promise.
Is OKLO Stock a Good Buy?
On Wall Street, Oklo stock carries a Moderate Buy consensus rating based on six Buy and three Hold ratings. No analyst rates the stock a sell. Oklo's average stock price target of $54.40 implies about 15% upside potential over the next twelve months.
NuScale Power (NYSE:SMR) | The SMR Pioneer with a Head Start
NuScale Power holds a distinct advantage as the first U.S. company to secure Nuclear Regulatory Commission (NRC) approval for its small modular reactor (SMR) design—the 77-megawatt VOYGR module.
But the company isn't resting on this milestone; it is rapidly advancing a 2-gigawatt agreement with Standard Power to supply data centers in Pennsylvania and Ohio. Despite posting losses as it invests in expanding its supply chain, NuScale's Q1 report revealed an impressive 857% year-over-year revenue increase. The recent Meta-Constellation Energy deal also boosted NuScale's stock, signaling strong market confidence in its role in nuclear's resurgence.
What distinguishes NuScale from its competitors is its pragmatic approach. Its light-water reactor technology is more established and less experimental than Oklo's fast reactors, making it a safer candidate for near-term deployment. However, supply chain constraints and complex project coordination remain significant challenges that could delay progress.
Still, with tech giants like Google and Amazon entering SMR agreements, NuScale's first-mover advantage positions it well to meet growing energy demands. Its factory-built, modular design aligns perfectly with data centers' requirements for scalable, reliable power.
Is NuScale Power a Good Stock to Buy?
NuScale Power is currently covered by eight Wall Street analysts, who generally hold a bullish outlook. The stock carries a Moderate Buy consensus rating, reflecting five Buy ratings, two Holds, and one Sell over the past three months. However, SMR's average price target of $27.42 suggests approximately 12% downside potential over the next twelve months.
Why Nuclear Energy Is the Smart Bet for AI's Future
The resurgence of the nuclear sector is no coincidence, as the soaring energy demands of AI are reshaping the industry landscape. Constellation Energy (CEG) brings scale, Oklo (OKLO) leads with innovation, and NuScale Power (SMR) holds a regulatory advantage.
Each faces its own challenges—CEG's stock trades at a premium valuation, Oklo is still managing significant cash burn, and NuScale navigates operational risks. Nevertheless, the potential upside is substantial. With tech giants committing to multi-gigawatt agreements and nuclear capacity projected to quadruple by 2050, these companies are at the forefront of a transformative energy revolution and merit close attention.