Nuclear Energy Weekly Value Investing Memo

Week of July 1, 2025

Market Sentiment & Trends

This week’s news reconfirms nuclear energy’s rising status as both a grid reliability solution and a strategic utility for tech and industrial growth. Demand drivers include:
- Growing AI/data center needs (Google, Microsoft, Amazon heavily engaged)
- Policy tailwinds and new US DOE initiatives
- New partnerships and investments from leading tech and engineering firms
- Heightened urgency, both industrially and politically, for next-gen nuclear and advanced enrichment.

The overall sentiment is incrementally positive: there’s powerful momentum for nuclear expansion (especially advanced/small modular/fusion), but major regulatory, funding, and execution risks remain.

1. Key Value Signals

• Big Tech Putting Capital to Work: Google commits to buying electricity from both fusion (Commonwealth Fusion Systems) and fission (Kairos Power—an SMR startup), signaling a long-term offtake demand for clean nuclear output. These deals, while years out, anchor real business models and future cash flows in an industry where certainty has been rare.

• DOE Fast-Tracks Advanced Nuclear: The US Department of Energy (DOE) launched a pilot program to authorize private test reactors—removing a longstanding barrier for early-stage and test deployments. This regulatory facilitation could accelerate revenue opportunities for startups.

• AI Meets Nuclear Construction: Palantir—a leader in data analytics—announced its software will drive efficiency in reactor construction (with “The Nuclear Company”), signaling an ecosystem of digital infrastructure forming around new builds.

• Strategic Collaborations: Oklo (recent SPAC, high-profile leadership) and Bill Gates’ TerraPower signed a partnership around domestic HALEU enrichment—critical for next-generation reactors and a US supply chain play.

• Major Fusion Funding: Westinghouse and ITER sign a $180M contract to push fusion technology, while global fusion market size forecasts surge.

• IPO and Recent SPAC Activity: Oklo’s public listing, ongoing chatter around SMR startups seeking either funding or public exits.

2. Stocks or Startups to Watch

A. Public/Recent IPO & Small Cap Opportunities - Oklo (NYSE: OKLO) - Profile: Recent SPAC debut; backed by substantial leadership and Bill Gates’ circle via TerraPower collaboration. - Signals: Strategic partnerships, domestic enrichment angle, close alignment with DOE pilot regulatory streamlining. - Check: Valuation (historically rich for early-stage nuclear), business execution, and regulatory milestones.

• Kairos Power (private, but IPO/speculation possible)
• Profile: Small modular reactor company. Google offtake deal is a significant vote of confidence.

• Signals: Market validation, long-term revenue anchor (if plant comes online).

• Commonwealth Fusion Systems (private)

• Profile: Leading fusion startup; Google as an offtaker/investor.
• Signals: Earliest in its lifecycle, but with elite backing. Watch for pre-IPO funding rounds and cap table changes.

B. Established, Undervalued Nuclear Plays (Check Valuation/Fundamentals) - BWX Technologies (NYSE: BWXT) - Profile: Established supplier for nuclear reactors and specialized components. - Moat: Deep US government/defense contracts, emerging advanced reactor supply role. - Valuation: P/E ratio tends to be market-comparable, but free cash flow strong and recurring revenue profile. - Signal: Exposure to multiple advanced reactor programs, SMR rollout, and robust political support.

• Centrus Energy (NYSEMKT: LEU)
• Profile: Only US public company with commercial uranium enrichment capability—potential HALEU winner.
• Signals: Vital for fueling advanced reactors; highly levered to new DOE policies.
• Risks: Small cap, volatile, but high convexity if advanced nuclear takes off in '26+.

C. Infrastructure, EPC, and Software - Palantir Technologies (NYSE: PLTR) - Profile: Now branching into nuclear with specialized construction/efficiency software. - Signal: Long-term, stickier defense/critical infrastructure business.

3. What Smart Money Might Be Acting On

• Pre-emptive Strategic Investment: Major techs (Google especially) are locking in low-carbon electricity contracts before physical infrastructure is built. Early investor entry into fusion/SMR supply chains could offer “picks & shovels” asymmetry.

• Pivot to Domestic Supply Chain: Oklo/TerraPower collaboration for HALEU enrichment directly addresses “made in America” energy/defense policy. This is the tip of a deglobalization and re-onshoring trend—any US enrichment or SMR component supplier could be in play.

• Software/Services Layer: The nuclear restart will bring new opportunities for “enabling” firms: EPC (AECOM, AtkinsRéalis, Arup), new digital/digital twins/AI (Palantir), and regulatory facilitators.

• Advanced Reactor “First Movers”: Policy support (DOE program) will favor companies close to deployment/breakthrough—those that can move from pilot to cash generation by 2026-2030. Early capital and regulatory champions could see premium returns.

4. References

• Google’s Data Center Bets — TechCrunch
• US DOE Pilot Program — POWER Magazine
• Palantir and Nuclear — POWER Magazine
• Oklo/TerraPower/HALEU — Oil & Gas 360
• Westinghouse/ITER Contract — POWER Magazine
• Fusion Market Outlook — Precedence Research
• BWX Technologies (BWXT) — Investor Relations

5. Investment Hypothesis

Thesis: The convergence of policy, technology (AI/data center demand), and strategic investment from leading corporates is catalyzing a new nuclear buildout cycle—especially in the US. First-mover advanced fission and fusion startups, US-centric enrichment supply, and key enabling technologies (digital/twin/AI/construction) stand to generate outsize returns, particularly ahead of confirmed revenue streams in the early 2030s.

• Core Bets:
• Oklo — if price corrects—offers a uniquely exposed pure play on the regulatory shift and DOE pilot program.
• Centrus Energy — levered, high-risk/high-reward play on domestic HALEU enrichment.

• BWX Technologies — lower-risk, steady exposure to SMR and advanced builds, and possible defense tailwinds.

• Venture/Aggressive:

• Track private rounds (Commonwealth Fusion, Kairos Power); watch for IPO or secondary liquidity events.

• Monitor “picks and shovels” suppliers (engineering, digital, sensing, permitting).

• Catalysts:

• DOE pilot selections and project starts (late 2025/2026).
• Google/Microsoft/other tech-driven PPAs or partnerships.
• US and UK regulatory acceleration or major political support.

Risks: Execution slippage, cost overruns, regulatory reversals, or overhyped/illiquid microcaps. Fusion commercial viability remains >5-7 years out.

Summary Table

Bottom Line:

The investable landscape for nuclear is evolving rapidly—value investors should focus on companies bridging policy tailwind into real commercial assets, with an eye for US-centric supply, strategic contracts, and digital enablement of an emerging nuclear buildout cycle. Small/underfunded public names could offer asymmetric re-rating as the cycle unfolds.