Key Points
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Between 2005 and 2025, electricity demand increased by 10%, but it is projected to increase by 60% over the next 20 years.
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Nuclear power is expected to help meet the increasing demand for reliable electricity.
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Constellation Energy, NuScale Power, and Brookfield Renewable Partners are three different ways to play nuclear power’s expected resurgence.
- 10 stocks we like better than NuScale Power ›
The world is increasingly shifting to cleaner forms of energy. The best example is the ongoing shift toward electric vehicles. However, as that trend continues, there’s also new demand for electricity from other sources, notably artificial intelligence (AI). The world is at an electricity inflection point.
Between 2005 and 2025, electricity demand increased 10%. Between 2025 and 2045, demand is projected to rise by 60%. Huge capital investments will be needed, but not all of it will go toward solar and wind, which are intermittent energy sources. Nuclear power, which provides clean, always-on, baseload power, is likely to see a renaissance, as well. Here are three ways to play the increasing demand for nuclear power.
Constellation Energy is a nuclear giant
Constellation Energy (NASDAQ: CEG) is an independent power producer, which means it sells electricity directly to its customers at market rates. It differs from a regulated utility, which must have its rates approved by the government. Rising electricity demand could give Constellation the upper hand when it signs contracts.
That said, Constellation is one of the largest nuclear power producers in the country. It also owns natural gas utilities and clean energy assets. So you aren’t exactly going all in on nuclear power, but you are getting material exposure to the sector. Notably, the company is already working with tech leaders like Meta (NASDAQ: META) to help support the artificial intelligence build-out.
The stock has pulled back after a big rally, falling roughly 40% from its 2025 all-time high. While it is far from cheap, the price-to-earnings ratio is a far more reasonable 20x, down from the nearly 50x it stood at as 2025 drew to a close. For a long-term investor, Constellation Energy could be a good way to get broad exposure to the increasing demand for nuclear power.
Go all-in with nuclear start-up NuScale Power
If you’d rather swing for the fences, you’ll probably find NuScale Power (NYSE: SMR) more to your liking. It is a start-up looking to build a business around small modular nuclear reactors (SMRs). This is an exciting technology that could transform the way the world uses nuclear power. SMRs are factory-built, easily transportable, and are expected to be small and safe enough to be placed near population centers. In other words, they could provide dedicated power to an AI data center. Conversely, they could also be strung together to provide utility-scale power.
There’s just one problem. NuScale Power is still losing money, and its technology, while having earned important regulatory approvals, has yet to be deployed commercially. It is working on its first sale, but there are no firm agreements yet. Until it has built an SMR and that SMR has successfully operated, there’s no way to know if NuScale can execute on its big plans. Notably, it will likely lose money for several more years as it builds out its business, even if it is successful.
This is a high-risk stock that only the most aggressive investors should consider. But, if that’s the type of investor you are, buying today could get you in on the ground floor of a company that could change the nuclear power industry as we know it.
Brookfield Renewable is a safe, income-oriented nuclear play
The big draw with Brookfield Renewable Partners (NYSE: BEP) is its attractive 4.6% distribution yield. The distribution has been increased at an annualized rate of 5% over the past decade. It owns 50% of Westinghouse, one of the nuclear power industry’s largest service providers. It’s a picks-and-shovels play, but one that even the most conservative investors should feel comfortable owning.
Part of the appeal is the business’s diversification. It has operations in North America, South America, Europe, and Asia. In addition to nuclear power services, it also operates solar, wind, hydroelectric, and storage assets. It is, basically, a one-stop shop for clean energy investors. And, like Constellation Energy, it already has deals with big AI players, including Microsoft (NASDAQ: MSFT) and Google. The key takeaway here is that nuclear power doesn’t have to be a high-risk investment.
Three ways to play the nuclear power boom
If you want direct exposure to nuclear power and to leverage yourself to rising electricity demand, you’ll probably find Constellation Energy attractive. If you are a risk taker, nuclear power start-up NuScale Power lets you buy into a technology that could revolutionize the nuclear power industry. And for income investors or those who like to avoid risk, Brookfield Renewable’s Westinghouse investment is likely to generate attractive cash flows for years to come, as nuclear power gains traction as a reliable base-load power source.
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Reuben Gregg Brewer has positions in Brookfield Renewable Partners. The Motley Fool has positions in and recommends Constellation Energy, Meta Platforms, and Microsoft. The Motley Fool recommends Brookfield Renewable Partners and NuScale Power. The Motley Fool has a disclosure policy.
