Nano Nuclear Could Be a 10X Stock, But Investors Should Know This 1 Thing Before Buying

Around two and a half years ago, at COP28, 20 countries committed to tripling their nuclear energy capacity by the year 2050. In recent years, the U.S. has been taking steps to fast-track licensing and accelerate the deployment of advanced nuclear technologies, such as microreactors and small modular reactors (SMRs). Hyperscalers are intrigued by the technology, which could address the growing energy demands of modern data centers.

One company developing microreactor technology is Nano Nuclear Energy (NASDAQ: NNE). It recently became the first commercial developer to secure formal acceptance from the Nuclear Regulatory Commission (NRC) for a microreactor construction permit.

With nuclear energy on the rise, Nano Nuclear could be a massive winner for long-term growth investors. But there's one big thing you should be aware of before buying the stock right now.

Image source: Getty Images.

The future of nuclear energy is coming

Nano Nuclear Energy develops advanced, solid-core, factory-fabricated microreactors that are highly portable, enabling them to deliver reliable, carbon-free energy to remote locations, military bases, industrial facilities, and data centers. Its KRONOS microreactor design serves as stationary power for high-capacity industrial applications, while its ZEUS microreactor is a highly portable, fully sealed system for remote operations.

What makes Nano's microreactors appealing is that they use tri-structural isotropic (TRISO) fuel and helium coolant, meaning the reactors require no water for cooling and can shut down safely without human intervention or external power.

According to projections from the International Atomic Energy Agency (IAEA), global nuclear energy capacity could more than double by 2050, with SMRs playing a key role in the expansion. Microreactors, a subset of SMRs, could play a key role in helping hyperscalers meet their growing power needs by providing independent baseload power directly on-site.

Investors must be realistic about Nano Nuclear's timeline

Nano Nuclear recently secured the U.S. Nuclear Regulatory Commission's (NRC) formal acceptance of its construction permit application for its project at the University of Illinois. That said, it will be a while before one of Nano Nuclear's microreactors becomes operational. That's because the NRC still has to do a detailed evaluation of the KRONOS reactor's safety, engineering, and environmental footprint. Nano Nuclear expects this review to be done by 2027.

Once the NRC's review is complete and approved, Nano Nuclear expects to break ground on its full-scale KRONOS prototype in late 2027. From there, it will take a couple of years to build the prototype, which isn't expected to come online until 2030 at the soonest.

Nano Nuclear's promising technology could usher in a new era of energy generation, making nuclear energy portable, scalable, and accessible for off-grid use. That said, the review and approval process can be long and drawn-out, and any delays could push back what is already a multi-year timeline. If you buy today, you'll need to be patient as the process plays out. As for myself, I'll take a wait-and-see approach before buying the upstart nuclear energy stock.

Courtney Carlsen has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.