Data Centers are Going Nuclear

Big tech companies like Google, Microsoft, and Amazon are increasingly turning to nuclear energy as a reliable, sustainable power source for their data centers. With AI and data-intensive technologies driving up electricity needs, these firms are seeking solutions that provide consistent, round-the-clock power while aligning with their carbon reduction goals.

Google is exploring nuclear options, including Small Modular Reactors (SMRs), to support its clean energy initiatives and achieve its goal of 24/7 carbon-free energy by 2030. The rapid growth in AI's power demands has made achieving such goals more challenging.

Microsoft is also making moves in this space, having secured a deal with Constellation Energy to power a Virginia data center using energy from a revived nuclear plant. Similarly, Amazon has acquired a data center in Pennsylvania, which will be powered by a nearby nuclear facility.

Now, let’s look at two companies that might benefit from this nuclear trend.

#1 Constellation Energy (CEG)

Constellation is well-positioned as an early beneficiary, already working with Microsoft on nuclear power supply. As one of the largest nuclear power generators in the U.S., it operates over 20 reactors, which contribute to around 60-70% of its total generation capacity. In addition to nuclear, Constellation also generates power from natural gas, solar, and wind, giving it a balanced energy mix that supports both reliability and sustainability.

Spun off from Exelon in 2022, Constellation has been a standout performer, with its stock up 483% in just two years.