That didn’t take too long. Nuclear stocks are cooking today after the biggest nuclear power company, Constellation, signed a historic power supply deal with the U.S. government.
That didn’t take too long. Nuclear stocks had been correcting since Thanksgiving. But they are cooking today after the biggest nuclear power company, Constellation, signed a historic power supply deal with the U.S. government.
Outsider Club started recommending the nukes back in June when standout performers like NuScale Power (SMR) and Vistra (VST) were trading for $6 and $90 respectively.
Both stocks had a good day today. As I write this NuScale is ramping 15% to $21.40 and Vistra is up 8% to $161.50.
The immediate reason is that Constellation Energy (CEG) just signed a 10-year deal for $840 million to supply several government agencies with electricity.
Yes, this deal is significantly lower than the $16 billion deal it signed with Microsoft to restart Three Mile Island we discussed back in September. But it might be a more significant event for investors because it’s a deal with the Feds…
It’s All About Regulations
The stock market took off on a moonshot rally after the election for two reasons: taxes and regulations. The Trump administration is expected to cut both, which should be good for business.
For instance, Trump has been very vocal about his “drill, baby drill” policy. He’s promised to cut regulations and speed permitting for oil companies in order to boost production and bring oil prices down. But you gotta wonder: are oil companies on board with this? Will they spend the money to bring more oil to market, push prices lower, and impact their own bottom lines?
I’m skeptical. To me, oil companies seem pretty satisfied with the status quo for oil. As things currently stand, the global oil market is oversupplied by 1 million barrels a day. Natural gas production is one spot where increased production could be really good for investors, we’ll talk more about that in the future. Right now, we’re talking nuclear stocks…
I’m sure you’ve certainly heard about the massive electricity demands coming from the surge in power-hungry chips being installed in existing data centers, and the further demands that will be installed in the data centers now under construction.
If demand for oil is relatively static, the demand for electricity is booming. If the supply of oil is adequate, the supply of electricity is definitely not adequate.
Nuclear energy is a very good solution for meeting booming electricity demands. And the main thing holding it back right now is: regulation.
Small modular nuclear reactors can be built in a year and provide up to 300 megawatts of power. They can be built remotely and transported to an installation site. The first modular reactor prototypes were built in the late 1990s…
To date, the Nuclear Regulatory Commission has approved just one commercial design. One. And even then, the changes to the initial design were so overbearing and costly that the planned installation was scrapped.
But now, the U.S government is seeking its own nuclear power supply deals. And we have an incoming administration ready to take the ax to regulations…
Best Bet to Double Your Money in 2025 is….
For my 2025 Predictions, I wrote:
We’ve written a lot about small modular reactor (SMR) stocks at Outsider Club. The first was NuScale (NYSE: SMR) at $6 a share back in June. We’ve written about Nano Nuclear (Nasdaq: NNE) and Oklo (Nasdaq: OKLO).
Each of these companies has a very clear path to deployment and will be helped by regulatory changes that are likely under the Trump administration. NuScale and Oklo each have market caps around $2 billion, and Nano Nuclear is $800 million – they are all still small enough to have substantial upside.
NuScale was the first SMR stock I recommended and you always remember your first with extra fondness. But there can only be one. So the best pick to double your money is the one that’s backed by ChatGPT co-founder Sam Altman – that’s gotta be a marketing edge, doesn’t it? So my top pick to double your money next year is OKLO (Nasdaq: OKLO).
Shares of OKLO were up 24% today…
Cheers,
Briton Ryle
Chief Investment Strategist
Outsider Club
X/Twitter: https://twitter.com/BritonRyle
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Nuclear’s Regulatory Problem
https://www.outsiderclub.com/us-regulatory-clusterfck/
The Electricity Bull Market
https://www.outsiderclub.com/buy-electricity-stocks-now/
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