Nuclear energy stocks spent much of 2024 running at the top of the S&P 500. Constellation Energy, Vistra and other new nuclear-focused companies rode a wave of excitement as Big Tech scrambled to find the electricity needed to power its artificial intelligence ambitions.
Constellation Energy shares shot up 91% last year and Vistra stock rocketed 258%, placing both among the top S&P 500 stocks and the best 100 stocks of 2024. Now, Constellation Energy and Vistra are still towards the top of the S&P 500 to begin 2025.
Though regulatory hurdles and Trump-administration unknowns loom in 2025, analysts remain bullish on nuclear energy stocks for the year even as China's private DeepSeek AI startup shook the markets in late January.
Analysts note that forecasts show electricity demand is not slowing down anytime soon, given the growth in AI and data centers. So, are nuclear stocks a buy or a sell in 2025?
AI And Nuclear Energy Stocks
Artificial intelligence applications, as well as bitcoin mining operations, use immense amounts of energy. The demand comes at an opportune time for the nuclear power industry. Nuclear power had declined steadily over the past decade, with 13 plants closing in the U.S. since 2013. Accidents at Three Mile Island, Chernobyl and Fukushima loomed large in the minds of consumers, insurers and regulators. Long-term safety and environmental concerns over storing and disposing of spent radioactive fuel rods also created resistance to new nuclear plants.
Meanwhile, the idea of restarting existing nuclear plants and the promise of a new breed of small modular reactors have attracted a powerful fan base, including Bill Gates, Sam Altman and Jeff Bezos.
And the demand is well on its way. In the U.S., McKinsey & Co. projects that energy demand from data centers, particularly from centers powerful enough for AI programs to "train" themselves, will grow from around 4% of total energy demand now to 11% to 12% by 2030.
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A Grid Strategies report in early December pegged U.S. electricity demand growth of around 16% in the next five years, with about 128 gigawatts of new capacity needed by 2029. Grid Strategies previously predicted a 39-gigawatt demand increase.
Natural gas is an attractive option, according to analysts. But to ensure they have the energy supplies to run their data centers, many tech companies are investing in or partnering with nuclear power providers.
China's DeepSeek And Nuclear Stocks
Constellation Energy and Vistra both initially plummeted when DeepSeek released a powerful artificial intelligence program that it claimed cost just $5.6 million to build, marking a possible paradigm shift from the massive levels of investment by technology industry giants in energy and AI infrastructure.
The move, in the last week of January, marked a reverse of fortunes after the sector had broadly gained ground when President Donald Trump announced that Sam Altman's OpenAI, SoftBank and Oracle are planning a joint venture called Stargate, to build data centers and other AI infrastructure in the U.S., with investments of up to $500 billion.
Data centers, needed to "train" AI learning models as well as allow those models to produce conclusions from new data, are expected to increase demand for electricity through the decade. Big Tech players have looked to nuclear power, as well as natural gas, to answer the demand surge. However, the concern with China's DeepSeek is that the massive amount of investment is not necessarily needed for a capable AI model.
Morgan Stanley analyst Brian Nowak wrote that "it is likely that we will continue to see significant capex in the U.S." from stocks exposed to AI power infrastructure growth. Nowak added that the firm continues to expect "to see a large number of data center project announcements."
The analyst also wrote that the "cost of compute" for AI, which is the capital cost of a data center divided by the computational power of the data center, will fall by around 90% over the next 6 years. This will result in a "Jevon's Paradox" in which the rapidly falling cost of compute will lead to rapidly accelerating demand, according to Nowak.
In the aftermath of DeepSeek, Bank Of America lowered its Vistra price target to 183 from 206 and cut its Constellation Energy target to 366 from 380, even as the analysts noted the selloff was "an overreaction to this news." The firm noted that data center demand is likely to continue over the intermediate term, but the longer term has "a lower probability of the mega growth bull case."
Meanwhile, on Jan. 23 Guggenheim named Constellation Energy to its 2025 "best Idea: in ulitities. Guggenheim analyst Shahriar Pourreza also removed Vistra from the "best idea.
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Nuclear energy stocks broadly rallied in October, after Constellation Energy on Sept. 20 sealed a two-decade contract with Microsoft to provide nuclear power for the tech giant's data centers.
At the time, Morgan Stanley analysts proclaimed that the Constellation-Microsoft deal "proves out the value of nuclear power for hyperscalers, with higher prices for future deals" with the massive data centers.
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Constellation, a S&P 500 component, then started 2025 by announcing a 10-year, $840 million contract with the U.S. General Services Administration to supply power to facilities of more than 13 government agencies.
Meanwhile, nuclear stocks soared on Jan. 3 after the Treasury Department and Internal Revenue Service revised its rules for hydrogen production tax credits, allowing nuclear power providers to qualify.
Constellation Energy stock is up around 50% since the Microsoft deal, while Vistra shares have surged more than 80%.
Vistra operates a broad portfolio of power-generation assets, and says it competes in "all of the major competitive wholesale markets in the country."
In September and October, Amazon.com, Alphabet and Oracle all announced investments in developing a new breed of power plants called small modular reactors, or SMRs. No operating SMRs now exist, but a number of companies are developing the technology.
SMRs aim to provide power at the company level, drastically reducing the time and cost of permitting, constructing and operating full-scale nuclear facilities.
In early December, Meta Platforms announced plans to build a massive $10 billion artificial intelligence data center in northeast Louisiana. The project will be Meta's largest data center, according to the Facebook parent. Before the deal, Meta published a request for proposals for nuclear energy developers to provide one to four gigawatts of new nuclear generation capacity by the early 2030s.
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"We believe that nuclear energy can help provide firm, baseload power to support the growth needs of the electric grids that power both our data centers (the physical infrastructure on which Meta's platforms operate) as well as the communities around them," Meta said in a blog post.
Regulatory Battle To Keep Tabs On
To be sure, challenges are inevitable. Utilities American Electric Power and Exelon lodged protests against a $650 million deal last March between Amazon.com and Talen Energy. Talen was to furnish Amazon with a nuclear-powered AWS data center campus for which Talen's existing Susquehanna plant in Pennsylvania would provide dedicated power.
AEP and Exelon contended that the co-location arrangement bypassed federal charges incurred by grid operators. The Federal Energy Regulatory Commission agreed, rejecting the deal on Nov. 1.
While efficient, the scheme had "huge ramifications for both grid reliability and consumer costs," FERC Commissioner Mark Christie said in a statement.
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Electric utilities, especially those with nuclear power plants, have seen demand and prices soar amid the rapid buildout of energy-intensive AI data centers. The FERC order suggests that regulators, worried about the impact of that buildout, may block or restrict at least some similar co-location deals.
Amazon and Talen are "exploring the whole suite of commercial and legal solutions" to move the project forward despite the FERC ruling, Talen Chief Executive Mac McFarland told analysts in mid-November.
Emerging Nuclear Energy Technology
While analysts expect shares of Constellation Energy and Vistra will continue advancing in 2025, the outlook is less clear for companies focused on developing small modular reactors and volatility is projected to be the name of the game in 2025.
Oklo — the nuclear power startup backed by OpenAI head Sam Altman — saw its stock jump 101% in 2024. But the gain masked some wild gyrations. To date since the Constellation Energy-Microsoft announcement in September, Oklo stock has surged 725%.
Profits are still a distant target, though. Oklo forecasts a full-year operating loss of $40 million to $50 million in 2025. Its first Aurora SMR powerhouse is not expected to be operational until 2027.
Santa Clara, Calif.-based Oklo recently received letters of intent and plans to partner with "two major data center providers" to deliver up to 750 megawatts of power for "data centers across the U.S." Oklo said these deals bring its customer pipeline to about 2,100 megawatts at the end of Q3, up from 1,350 megawatts at the end of Q2.
Oklo is expected to report Q4 earnings on Feb. 25.
Meanwhile, other players have offerings under development. Westinghouse, now privately owned under a partnership between Brookfield Energy and Cameco, may be farthest along.
Among publicly traded names, Nano Nuclear Energy galloped 380% higher in 2024 since going public on the Nasdaq on May 8. And NuScale Power surged 445% in 2024, propelled higher by more than 50% gains in October and November.
Performance Of Nuclear Stocks
S&P 500 giants Constellation Energy and Vistra are up around 5% and 1%, respectively, in February. CEG and VST are both extended above traditional buy points, according to MarketSurge chart analysis.
Constellation Energy soared to an all-time high of 352 on Jan. 23 but has come down around 10% since then. The stock is up 39% in 2025 and jumped 25.2% to 305.19 during stock market trade on Jan. 10 after announcing it is acquiring Calpine, a privately owned natural gas and geothermal power generator for $26.6 billion. That move marked a breakout from a traditional buy point of 288.75 buy point.
Constellation Energy fourth-quarter earnings are expected towards the end of February with investors looking for guidance on how DeepSeek could impact deals with hyperscalers.
Meanwhile, Vistra also hit a record high on Jan. 23 of 199.84. VST has dropped 15% since that date and is trading tightly at its 50-day moving average.
Talen Energy is up around 10% in February. The stock has bounced along support at its 50-day line since August.
Vistra and Talen Energy Q4 earnings are due on Feb. 27.
SMR-play Oklo has soared around 30% this month, part of a 150% gain in 2025 so far. Fellow SMR-focused stock Nano Nuclear Energy swung to an all-time high of 48.05 on Jan. 24 but has retreated 30% since then.
NNE stock is down 14% in February.
Meanwhile, NuScale Power stock has draped itself across its 10-week moving average over the course a strong 2024 run.
Please follow Kit Norton on X @KitNorton for more coverage.
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