Amazon has just signed a 20-year nuclear power deal, highlighting the tech industry's growing reliance on nuclear energy to support AI data centers. Last week, the e-commerce giant committed to purchasing electricity from Constellation Energy's Calvert Cliffs Clean Energy Center in Maryland. This follows a similar 20-year agreement Alphabet made with Constellation to buy nuclear-generated power from multiple facilities in Illinois, Pennsylvania, and New Jersey.
Constellation Energy, which generates about 80% of the nation's nuclear power output, stands to benefit from this increasing demand. However, its stock has already more than tripled over the past three years, making it an expensive utility stock with little dividend yield. Instead, the article suggests that Cameco, a supplier of low-enriched uranium-235, may be a better investment opportunity.
Cameco owns 49% of Westinghouse, a major supplier of equipment and technology to the nuclear energy industry. The World Nuclear Association predicts that nuclear energy's total power output could triple by 2050, with significant growth expected from new power plants coming online around 2030. Despite a recent jump in response to Alphabet's power purchase agreement, Cameco's stock remains about 35% below analysts' consensus target price of $125.75.
The article also notes that while Cameco is a strong play on the nuclear energy trend, it was not included in The Motley Fool Stock Advisor's list of top 10 stocks for investors to buy now. Other stocks on that list, such as Netflix and Nvidia, have delivered substantial returns over the years.