The Nuclear Renaissance

The Nuclear Renaissance

As I mentioned in a previous Take, each morning I watch a YouTube clip of Godzilla versus King Ghidora where Godzilla “goes thermonuclear.” With all the hype—and fear—of artificial intelligence, and the surging loads on the energy grid, I delved into nuclear energy. This doesn’t address ethical implications, it’s strictly utilitarian.

The U.S. power sector stands at an inflection point. With AI and data center demand driving unprecedented electricity needs, nuclear energy has emerged from decades of dormancy to become one of the most compelling investment themes of2025.

Projected U.S. power grid additions through 2030 could reach $1.1 trillion in capital expenditure, with nuclear playing a central role?. The One Big Beautiful Bill Act has fundamentally altered the landscape, providing nuclear with updated protections and tax incentives through 2033?. For investors, the nuclear renaissance presents extraordinary opportunities—exposure to a potential $2.2trillion investment cycle through 2050?—balanced against regulatory complexity and extended timelines.

The Demand Catalyst

McKinsey projects AI-ready data center demand could rise 33% annually between 2023 and20304. This isn’t incremental growth—it’s a fundamental restructuring of electricity demand?. Microsoft’s agreement to purchase power from the restarted Three Mile Island reactor, Google’s partnership with Kairos Power, and Amazon’s SMR explorations represent Big Tech’s nuclear embrace5.

Unlike renewables facing intermittency challenges, nuclear provides the 24/7reliability data centers require?. The OBBBA maintains crucial IRA statutes—production tax credits (45Y), investment tax credits (48E), zero-emission credits (45U) through 2033—while curtailing wind and solar support after December 2027?.

Investment Landscape

The nuclear universe offers multiple entry points: Constellation Energy (largest U.S. nuclear operator) 6, American Electric Power (largest transmission owner) ?, and Southern Company (Southeastern footprint benefiting from data center expansion)?. The uranium supply chain includes Cameco Corporation (world’s largest publicly traded uranium producer) 7, Sprott Physical Uranium Trust (direct commodity exposure) 8, and GE Vernova (SMR development capabilities) 7.

The dividend plus buyback yield for quality nuclear utilities ranges from 4-7%?, with additional upside as the nuclear narrative gains momentum.

Risk Assessment

Nuclear investments carry unique risks. Technical complexity means cost overruns—extending 1 GW of capacity costs $500 million to over $1 billion???°.The NRC’s oversight adds complexity; permitting can extend timelines byyears??. Russia controls 40% of global enrichment capacity??, creating supply concerns.

Forward Projections

Near-Term (2025-2030): Nuclear generation will reach all-time highs in 2025??. 63 reactors under construction globally?4. China on track to become the world’s largest producer by 2030?5. Annual investment must double to $120 billion?4.

Medium-Term (2030-2040): Global capacity could reach 586-748 GWe?6. SMR deployment potential: 80 GW?4.Target costs declining to $2,500/kW in China, $4,500/kW in U.S./Europe?7.

Long-Term (2040-2050): Nuclear could expand from 413 GW to 812 GW?8. Nuclear-produced hydrogen reaching 20 million tons annually?8. Cumulative investment approaching $2.2trillion?.

Positioning

The nuclear sector stands at a generational inflection point. AI-driven demand, supportive policy, and technological advancement have created an opportunity that may not repeat for decades. However, this requires patient capital—extended development timelines and regulatory intricacies demand a diversified approach.

For our clients, we recommend a conversation about nuclear based on your risk tolerance. The magnitude of the opportunity makes nuclear one of the most compelling themes for the next decade. Winners position early and maintain conviction through volatility. The nuclear renaissance is just beginning.