2 Nuclear Energy Stocks to Buy in May

Just when nuclear energy seemed to be a relic of the past, the industry is experiencing perhaps one of its biggest revivals in decades. Surging demand for clean, reliable power and advances in small nuclear reactors (SMRs) have breathed new life into the once sleepy industry. Mix in growing demand for electricity from data centers, and a U.S. administration bullish on nuclear energy, and you have a recipe for monstrous growth.

As the Energy Department recently stated: "[T]he next American Nuclear Renaissance has arrived."

Over the next 25 years, the U.S. government wants to quadruple nuclear capacity from roughly 100 gigawatts (GW) in 2024 to 400 GW in 2050. That could be one reason Bank of America (NYSE: BAC) sees nuclear energy representing a $10 trillion market opportunity right now.

Call it what you like, but nuclear is certainly having a moment. The following two nuclear energy stocks could be among its biggest winners.

Image source: Getty Images.

Cameco

The next American nuclear renaissance won't go anywhere without fuel. Right now, Canadian-native Cameco (NYSE: CCJ) is one of the largest suppliers of uranium fuel to the United States -- and the world.

In 2024, Cameco produced about 17% of the world's uranium, second only to Kazakhstan's Kazatomprom (21%). With Orano, the next closest producer, at 11%, Cameco is clearly one of a very small group of companies that is dominating the global uranium supply right now.

That position could come to matter even more as uranium demand rises. According to the World Nuclear Association, demand is expected to climb about 28% by 2030 and more than 100% by 2040. For Cameco, whose uranium mines include McCarthur River and Cigar Lake, two of the world's largest uranium mines, that could mean stronger pricing power, or volume, or both.

The icing on the cake here is that Cameco also owns a 49% stake in Westinghouse, an engineering company that is designing a small modular reactor. Fun fact: Westinghouse supplied the first commercial pressurized water reactor in 1957. Today, Westinghouse is part of an $80 billion agreement with the U.S. government to build new reactors for AI deployment in the U.S.

However you slice it, Cameco has the assets and uranium to become one of the biggest winners of the nuclear resurgence.

NuScale Power

NuScale Power (NYSE: SMR) is an SMR company with a head start in the nascent small reactor market. It is the only U.S. company with an SMR design that's been approved by the Nuclear Regulatory Committee (NRC).

That matters because SMR technology could be the primary driver of future growth in the nuclear industry. As Bank of America puts it, small modular reactors could be "one of the most consequential energy technologies for the next 25 years."

The reason is simple: Unlike large nuclear power plants, which cost billions and can take a decade or more to complete, SMRs have the advantage of being pre-made in a factory. That not only (in theory) lowers construction costs, it could also reduce construction time from a decade to two or three years.

I write "in theory," because SMR technology remains largely a lab-tested concept with no commercial reactors in the U.S. in operation. Even NuScale, which has enjoyed its NRC-licensed design for over a year now, lacks a first firm sale of its SMR technology, which underscores how much initial friction confronts a novel nuclear energy company.

If NuScale can succeed in building out its first SMR plants within an appropriate time frame and budget, this company's sales could hit the ground running. However, until it can prove that SMR technology is as cheap and easy to fabricate as hoped, NuScale stock, currently down about 80% from its most recent high, will be heavily limited in upside growth.

All things considered, nuclear energy is moving back into the spotlight, and these two companies sit on different sides of a similar growth story. Another way to play this growing trend in energy is a nuclear energy exchange-traded fund (ETF), which could capture the same long-term growth with slightly less volatility.

Bank of America is an advertising partner of Motley Fool Money. Steven Porrello has positions in NuScale Power. The Motley Fool has positions in and recommends Cameco. The Motley Fool recommends NuScale Power. The Motley Fool has a disclosure policy.