Is the AI Bubble Real? Who Knows? This Stock Should Thrive Regardless.

Fears abound in the financial media of an artificial intelligence (AI) bubble forming. Whether it is or isn't is up for debate. So, what's an investor to do? You want to capture any gains the AI bull run still has in it but you also want to hedge against a potential bubble.

Fortunately, there are many industries set to profit from the AI industry without being directly involved in it. One such industry is energy, nuclear energy in particular.

According to the International Energy Agency (IEA) the global demand for electricity from AI data centers is set to double by the end of the decade.

The U.S. Department of Energy has set a goal to triple America's nuclear energy capacity by 2050 and small modular reactors (SMRs) are shaping up to potentially be a solution as well. BWX Technologies (NYSE: BWXT) is a leader in that particular field.

The power of the atom in the palm of your hand

Based in Virginia, BWX Technologies has long been a leader in naval nuclear propulsion. The company has built over 400 nuclear power systems for U.S. Navy submarines and surface vessels.

Building pint-sized nuclear reactors is something it has been doing since the 1950s when it designed and fabricated parts for the USS Nautilus, the world's first nuclear-powered submarine.

And today the government remains BWXT's largest single customer. For its most recently reported quarter (the third quarter of 2025) government operations generated $617 million in revenue for BWX, up 10% year over year.

By comparison, its commercial operations generated $251 million. But that sector is where most of the company's growth comes from as commercial revenue was up 122% year over year in Q3 2025.

Also worth noting, in its latest results, the company saw its operating free cash flow climb 338% and it achieved an operating margin of 17.7%.

In addition to reactors and engineering, BWX also produces advanced nuclear fuel for use in next-gen reactors. Namely, it makes tristructural isotropic (or TRISO) fuel, which is significantly more robust than conventional fuel and is capable of resisting meltdown by being its own containment system and withstanding high temperatures.

That fuel is what the company's BWXT Advanced Nuclear Reactor (BANR) is meant to use. The BANR is capable of being built in a factory and transported to where it's needed. There, it's put together and can generate 50 megawatts of power from a high-temperature gas reactor. The whole thing takes up a fraction of the space of a conventional nuclear reactor and was designed with data centers in mind.

Image source: Getty Images.

The idea is you build a cluster of data centers, plop an SMR in the middle of them, and it powers the data centers without drawing power from the grid and spiking local energy costs.

However, while the BANR can be used for data centers, it was also designed for remote municipalities; oil, gas, and mining facilities; and campuses. So, you can profit from AI's power demands without having to buy any AI stocks.

BWX Technologies is a fast-growing company with a cozy relationship with the U.S. government and the capability to profit from AI without the risks of a potential bubble. And if that bubble pops, BWX will be well insulated as AI isn't yet a particularly large part of its business.

James Hires has positions in BWX Technologies. The Motley Fool has positions in and recommends BWX Technologies. The Motley Fool has a disclosure policy.