Google Signed a Deal for Existing Reactors. So Why Did Oklo and NuScale Jump on the Constellation Energy News? The Read-Through Investors Are Missing.
Key Points
Google's parent, Alphabet, has made a long-term commitment to purchase electricity from nuclear power facilities that Constellation Energy has yet to build.
This confident commitment underscores a broader, renewed interest in well-proven nuclear power.
There’s more than one way to produce, deliver, and consume nuclear-generated electricity, each with its own cost and functionality profile.
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The technology sector's commitment to nuclear energy continues to strengthen. Just last week, Google's parent company Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) agreed to purchase nuclear-generated electricity from utility company Constellation Energy's (NASDAQ: CEG) existing nuclear power plants for 15 years, in addition to making a 20-year agreement to purchase 890 megawatts' worth of power from nuclear power production facilities that Constellation will build in the future. Alphabet's long-term commitment will enable Constellation Energy to confidently invest $4.3 billion in new nuclear energy capacity, adding to its already-extensive nuclear power portfolio.
Constellation shares jumped on the news, of course. But so did shares of small modular reactor (SMR) developers Oklo (NYSE: OKLO) and NuScale (NYSE: SMR), despite having no involvement in Constellation's agreement with Google. What gives?
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A new way to create and consume nuclear energy
NuScale and Oklo may be positioned to enter the nuclear energy business. However, they're not like Constellation. Constellation Energy's typical nuclear power facility is built to serve hundreds of thousands of utility customers.
NuScale and Oklo, on the other hand, are working on small-scale reactors designed to power facilities such as refineries, smelters, and desalination plants, built where the electricity is consumed.
The two approaches to providing power are obviously very different -- different enough that investors seemingly shouldn't conflate the two. Yet, they did. Why?
Because there's a more philosophical message being delivered here. That's the general recognition that nuclear energy is a far more practical solution to the growing power shortage that renewables were expected to shore up by now. Alphabet's management may not be interested in small modular nuclear reactors (yet). Other companies could be, given the broader reacceptance of this once-waning energy source. Investors are simply connecting the dots, and reasonably so.
Small modular reactors will feature prominently in the future
SMRs will never account for the lion's share of the planet's nuclear power generation, to be clear. Their fiscal math just doesn't make sense at scale.
Nevertheless, when grid independence is necessary and desirable, and the need is modest, they do have their place. That's why there are now over 70 small modular reactors already planned, if not already being built, according to estimates from the World Nuclear Association, compared to none in true commercial operation.
Moreover, the International Atomic Energy Agency expects about one-fourth of the world's new nuclear energy production capacity established between now and 2060 to come from small modular reactors, aligning with the International Energy Agency's prediction that the SMR power output will grow from less than 1 gigawatt in 2030 to around 100 gigawatts by 2050.
Don't miss the forest for the trees
For what it's worth, Constellation Energy isn't ignoring the potential of small modular reactors. In July 2026, it made a strategic equity investment in privately held modular reactor developer Blue Energy. Constellation just has more pressing, larger-scale concerns to focus on right now.
Investors are more forward-thinking, recognizing that Alphabet's long-term interest in Constellation's supply of nuclear-generated electricity is a sign of a much broader philosophical movement with room for more than one winner.
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James Brumley has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet and Constellation Energy. The Motley Fool recommends NuScale Power. The Motley Fool has a disclosure policy.
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