Through 2030, energy demand in the United States is expected to grow by 4% annually. But here’s the thing: most of that growth will be driven by the construction of data centers to support the artificial intelligence (AI) industry. Data centers energy demand as a percentage of total energy demand in the U.S. is expected to grow from 4.3% in 2024 to 11.7% by 2030.
The biggest winners of this transition may not be data center companies or AI start-ups. The real winners could be small modular reactor (SMR) businesses like Oklo (OKLO 4.02%) and NuScale Power (SMR 2.58%). These companies, which design and manufacture miniature nuclear reactors, could supply the data center and AI industries with clean burning, highly scalable power sources not reliant on any conventional power grid.
Should you trust your money with Oklo or NuScale? The answer might surprise you.
Image source: Getty Images.
Oklo vs. NuScale Power: the choice is clear
Before we dive in, it’s important to understand where small modular reactors stand in terms of their practical viability.
According to a recent report from Goldman Sachs, “the next nuclear age will look different from the last.” The report goes on to say that “small modular reactors (SMRs) are shaping what the revival of traditional nuclear fission could look like…These technologies, long brushed off as too far from commercialization, are now drawing significant public and private sector support.”
SMR technology has been in development for more than 20 years. Only a handful of small projects are in commercial operation globally. The issues that have plagued SMR technology are similar to the challenges faced by all nuclear technologies, namely high construction costs, long lead times, and lack of reliable proof that they are more economical than large conventional nuclear plants.
Today’s Change
(-2.58%) $-0.32
Current Price
$12.06
Market Cap
$3.9B
Day’s Range
$11.72 – $12.34
52wk Range
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Volume
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Avg Vol
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Gross Margin
33.84%
The current explosion in AI, however, could finally unlock the potential for SMR stocks like Oklo and NuScale. AI businesses — and more importantly, the industries that serve those businesses, like data center operators — are hungry for more power. They may even be willing to pay higher operational costs over the long term if the power is dedicated, scalable, and reliable. That’s especially true of SMR technologies that are deployable to remote, cold-weather locations where cooling costs are lower.
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Current Price
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Market Cap
$9.8B
Day’s Range
$59.55 – $63.16
52wk Range
$17.42 – $193.84
Volume
106K
Avg Vol
10M
With this context, the choice of SMR stocks is clear: Oklo is the superior choice. Oklo is much more focused on serving the AI industry with its smaller 15 to 75 megawatt reactors, while NuScale is better positioned to meet the needs of large utilities through multi-billion dollar projects. This difference is arguably a big factor behind Oklo’s $9.1 billion valuation versus NuScale’s much more modest $3.7 billion market value.
The more you dig into Oklo’s technology, the more you will come away believing it’s better positioned than NuScale to target the AI market. And because AI is perhaps the biggest reason SMR technology has received newfound hype, Oklo appears to be the clear long-term choice despite its higher valuation.