2 Nuclear Energy Stocks to Buy in March
It has been a rough year for nuclear energy stocks that aim to bring small modular reactors into the mainstream. Oklo(NYSE: OKLO), for example, has seen its shares fall by more than 10% so far this year. NuScale Power(NYSE: SMR), meanwhile, is down by nearly 20%.
But the story of small modular reactors (SMRs) -- a technology that could revolutionize nuclear power by making it faster, cheaper, and more efficient to deploy nuclear infrastructure -- won't be measured over a period of months. This story won't even be measured over a period of years. Instead, this is an opportunity that could persist for decades.
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For investors looking for cheap growth stocks that can deliver truly massive upside potential, stocks like NuScale and Oklo continue to be attractive. There's one big reason to be bullish right now. But there's also a major reason to remain cautious.
Oklo and NuScale Power stocks are cheap versus their potential
Most experts agree that, at least on paper, the potential for small modular nuclear reactors is tremendous. The biggest catalyst for growth is the rapid buildout of data centers to power AI development. For now, AI applications and the data centers that power them require huge amounts of electricity. Nuclear has the potential to meet these rising power needs in a low-carbon way.
But historically, building new nuclear facilities has been expensive and time consuming, sometimes taking a decade or more to get a project up and running. Small modular reactors, at least in theory, should be faster and cheaper to deploy.
Many experts are bullish on the technology's potential. A new report from Bank of America believes nuclear energy in general could become a $10 trillion opportunity, holding "the answer to the world's power shortages." Bank of America concluded that "In many ways, nuclear energy has been 'rediscovered' amid surging electricity demand ignited by the rise of AI/data centers, building electrification, industrial growth, and EV."
It doesn't take much number-crunching to see the potential in both Oklo and NuScale stocks. NuScale's market value is down to just $4 billion following the pullback. Oklo's valuation, meanwhile, now hovers at just about $10 billion. But before you pull the trigger, it's critical to understand the risks involved in these promising growth stocks.
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