Tech giants pile into nuclear – can these uranium stocks take advantage?
The overwhelming nature of the tech giants’ capital spending capabilities has brought investors rushing into the nuclear sector, as Alphabet (US:GOOGL), Amazon (US:AMZN) and Meta (US:META) all throw money at the companies able to provide them with reliable electricity.
The power is needed for artificial intelligence (AI) data centres, largely in the US. The scale is significant – a single AI data centre needs as much electricity as 100,000 households in a year, according to the International Energy Agency.
The beneficiaries have already included power plant owners and those offering critical services such as enrichment. One of the industry’s largest players, Holtec, has planned an IPO in early 2026. It is restarting the Palisades plant in Michigan and is also heavily involved in decommissioning – the process of shutting down old reactors and managing the clean-up – and nuclear waste disposal.
| Company | Energy focus | Latest activity |
| Microsoft | Nuclear/geothermal | Deals for SMRs & geothermal pilots |
| Alphabet | Fusion/SMRs/Geothermal | Fusion offtake deal, SMR deals |
| Amazon | SMRs | Partnerships with X-energy, Energy Northwest, Dominion |
| Meta | Nuclear/geothermal | 1.1GW nuclear power purchasing agreement, geothermal investment |
| Source: Ocean Wall |
The chief executive said at the end of June that the cash raised in the IPO – up to $5bn (£3.7bn) according to Barron’s – would be used to fund small modular reactor (SMR) projects. These are smaller reactors that the tech giants are also investing in, although they are largely untested at a commercial scale. Rolls-Royce (RR.) is developing them in the UK, in a project part-funded by the government.
The US nuclear rush has also led to the restarting of old reactors, such as Three Mile Island, as well as the privately funded SMR projects. Uranium demand will also be supported by the fact the tech giants are paying for older plants to stay in operation past previous closure dates.
“These AI ambitions really have to reconcile with the physical reality that data centres require a lot of energy. But not only energy, but that’s base load energy, so energy that’s available 24/7,” said Alex Czinner, a research associate at merchant bank Ocean Wall.
He added that the net zero goals of the tech companies meant nuclear would remain a clear frontrunner to provide this, given the carbon emissions of gas or coal plants.
Uranium
Yellow cake, or U3O8, and enriched uranium are the critical materials for the nuclear industry. Even with a slight undersupply in the uranium market, prices for yellow cake have not been high enough to bring on new mines.
The market is in far better health than it was a few years ago, however, when the spot price was barely over $20 per pound (lb), and has rebounded in recent weeks to get close to $80/lb, according to pricing specialist UxC.
The test now is whether mining companies can experience the same investor rush as those further up the supply chain. The most prominent mining hopeful is NexGen Energy (CN:NXE), a Canadian company looking to build a new mine in Saskatchewan. There are questions about whether current pricing is enough for it to go ahead with the project in its current form, although permitting concerns are front of mind at the moment.
Andre Liebenberg, the chief executive of uranium vehicle Yellow Cake (YCA), said the supply situation was less secure than some in the market believe. “In the next three to five years, I just don’t see where meaningful supply can come on stream,” he said.
Alongside NexGen, the other two key developers are Deep Yellow (AU:DYL) and Paladin Energy (AU:PDN). Deep Yellow has greenfield projects in Namibia and Australia, while Paladin is restarting Langer Heinrich, also in Namibia, after struggling to get it to commercial production and pausing everything in 2018.
The mine has been hit by several delays, including a late cut to guidance in 2024 and a further delay to commercial production this year, which is set at 5mn lbs a year. But while new supply is not being added to the market, buyers have not yet started pushing up prices in any significant way.
Panmure Liberum analyst Tom Price remains sceptical about a run rate well beyond $100/lb, as some in the sector see as unavoidable.
“Further price upside from here requires an expanded [U3O8]-buying programme to emerge in the US, as it proceeds with the build-out of its conversion supply chain and expansion of nuclear power-gen capacity growth,” he said.
“Longer term, we continue to expect all prices to eventually come under pressure, as supply growth outstrips demand [growth] – responding to these higher price levels,” he added. By the end of the decade, Price sees annual uranium production hitting 160mn lbs for the first time since 2016.
Tech questions
Yellow Cake’s Liebenberg said the might of the tech giants and the waterfall impact of their investments would make the difference. “If you look at the [AI] hyperscalers getting involved, Meta and Amazon, for example [ . . . ] if one of them envisages problems in the fuel chain, I could see them getting involved in conversion,” he said, referring to the enrichment process, which has been dominated by Russia in recent decades.
“If conversion to pinch point, I could see them going after our inventory if they perceive fuel is going to be a choke point.”
This might be hopeful thinking from someone in charge of a 21.7mn lb stockpile of uranium, but the investment in existing midstream companies that have working SMRs and enrichment facilities, such as Asp Isotopes (US:ASPI) and Oklo (US:OKLO), show serious money is betting on the industry to keep growing.
The latter company is valued at almost $8bn due to its fast neutron reactor technology, which is set to be rolled out by the end of the decade. Oklo completed a $400mn capital raise last month while hardly denting its share price, which is up 135 per cent so far this year.
Such a share price uplift is unlikely for the miners unless there is an industry-wide realisation that stock levels may be far too low to keep reactors running within a few years. But the tech giants wading in and a further shift in enrichment capabilities away from Russia could change the market enough to make a few speculative investments worth it.