Analyst sees new opportunities in nuclear energy, as utilities report sharp growth in power demand
An analyst sees potential in nuclear stocks as electricity demand grows, driven by the rise of data centres and artificial intelligence (AI) technologies.
Anthony Crowdell, a research analyst at Mizuho, discussed the outlook during an interview with BNN Bloomberg, noting that electricity demand in the US had remained relatively flat for 15 to 20 years before a recent surge.
“Now all of a sudden you throw in this data centre AI thematic coupled with the onshoring of manufacturing here and now it’s been off to the races with utilities putting out demand growth numbers where again two to three years ago, we were zero to one per cent of demand growth,” Crowdell explained.
“Now we have some utilities putting out numbers about nine per cent. So, it’s just a step change in the amount of load growth that we need and also a change in the generation needs that are required to meet this new load.”
Crowdell’s comments come as major tech companies are increasingly turning to nuclear energy to meet their power needs. Last week, Amazon announced plans to invest in small nuclear reactors to supply power for its data centres and AI operations, following a similar announcement by Google.
Additionally, Bloomberg News recently reported that Microsoft has entered an agreement with Constellation Energy to source clean power from the Three Mile Island nuclear plant, which is set to restart.
Among the companies that Crowdell favours in this sector is Duke Energy.
He described the company as taking an “aggressive defense” approach, adding, “It’s one of the bellwethers in this space. It struggled for years, maybe with a weaker balance sheet and unregulated operations, (but) unregulated businesses are (now) all gone. It’s the cleanest this story has been in 20 years.”
“They built a nice credit cushion with the balance sheet, and they operate very well in all their jurisdictions,” Crowdell added.
