Nano Nuclear Energy Stock Is Down 60%. Is It Finally Time to Buy?

Nuclear energy is enjoying a revival as countries and companies see it as an effective way to meet the growing energy demand from data centers. One promising company developing next-generation micro reactors is Nano Nuclear Energy (NASDAQ: NNE).

The company's stock reached over $60 per share last year but has plummeted back down to earth. With shares down 60%, is the stock a buy? Let's dive into the company and its road ahead to find out.

Nano Nuclear Energy is making strides in micro reactor technology

Nano Nuclear Energy is an emerging nuclear energy technology company developing advanced micro reactors. Its primary product is the Kronos MMR Energy System, a stationary high-temperature gas-cooled reactor that uses tri-structural isotropic (TRISO) fuel and helium coolant. The benefit of TRISO fuel is that it can withstand much higher temperatures than traditional nuclear fuels, making it significantly safer.

The company is approaching a crucial regulatory milestone for its flagship Kronos system. In December, the company signed a memorandum of understanding with the University of Illinois Urbana-Champaign board of trustees to collaborate on the development, construction, and operation of the system on campus. It is on track to submit its construction permit application to the U.S. Nuclear Regulatory Commission in the first quarter.

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Nano Nuclear's management views fuel availability as one of the biggest hurdles for advanced nuclear reactors and aims to develop internal capabilities for fuel enrichment, conversion, and transportation. Through its subsidiary HALEU Energy Fuel, the company aims to build a domestic supply chain for low-enriched uranium (LEU) and high-assay low-enriched uranium (HALEU).

The long road ahead

Nano Nuclear's micro reactor technology is highly appealing because, in theory, it can be factory-fabricated and transported on site. This modular design enables rapid standard assembly and could help reduce capital costs and construction delays that often accompany traditional nuclear power plants.

That said, it is in pre-revenue and pre-commercial operations and has a long road ahead. It hopes to begin production of a full-scale prototype at the University of Illinois Urbana-Champaign in late 2027. However, its micro reactors won't be ready for commercial availability until the 2030s.

Nano Nuclear Energy stock is highly speculative, and much of its price action over the next several years will be driven by the progress of its construction and development of its micro reactor technology, along with its fuel supply chain. For that reason, most investors should avoid the stock and keep it on a watch list to see how its progress unfolds.

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.