The Trump administration’s move to take stakes in companies across industries may soon have a new target — nuclear power.
In a report last week, Compass Point analysts led by Whitney Stanco said the Department of Energy’s recent establishment of a new consortium for nuclear fuel paves the way for the Trump administration to take stakes in companies as part of the government’s quest to build a domestic supply of enriched uranium, the critical fuel used to make nuclear energy.
“Given the U.S. nuclear fuel industry’s interest in roughly $3.4 billion of federal funding from Biden-era appropriations, we believe it may be a target for future similar Trump administration deals,” Stanco wrote.
The DOE’s Office of Nuclear Energy is expected to work with industry participants in the coming weeks to identify participants and long-term goals.
The Trump administration has already announced deals with Intel (INTC) and rare earths producer MP Materials (MP), both of which involved the government backing major domestic manufacturing projects. Following the Intel deal struck earlier this month, Trump and other members of the administration suggested this would be the beginning of a broader investment strategy.
Stanco sees Bethesda, Md-based Centrus Energy (LEU) as a likely recipient of government backing, as it is the only domestic company currently producing enriched uranium under a DOE contract. Centrus shares have rallied over 180% year to date. BWX Technologies (BWXT), a Lynchburg, Va-based company with a $15 billion market cap, is also on the analyst’s list. Its stock is up 45% year to date.
The Russia-Ukraine war renewed national security concerns around nuclear power, as uranium enrichment has increasingly shifted overseas. Meanwhile, the AI boom’s surging energy demands have increased interest in nuclear energy as deals between Big Tech and nuclear energy providers have put a spotlight on the sector.
Nuclear energy providers Constellation Energy (CEG) and Vistra (VSTR) are each up more than 35% year to date on optimism of growing power demand for data centers.
On Tuesday, BofA initiated coverage of Oklo (OKLO), a builder of next-generation small nuclear reactors (SMRs), with a Buy rating. Its stock is up more than 1,000% over the last year as investors bet on nuclear energy as part of the AI trade. “Nuclear is regaining momentum, backed by both the DOE and data center operators, with Oklo well positioned to meet the rising energy needs of AI,” the firm wrote.
And while the administration’s high-profile Intel deal is seen as a novel arrangement, Compass Point’s Stanco notes that government ownership of nuclear fuel production is not unusual around the world.
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