2 Power Stocks Riding the AI Electricity Boom. Which Is Best for Your Portfolio?

From 2005 to 2020, U.S. electricity demand was essentially flat. That is, businesses and consumers continued to use roughly the same amount of total energy year after year. This resulted in minimal new energy capacity being adding to the electricity grid.

Then everything changed. Electricity demand started to rise. And now, experts believe electricity demand in the U.S. will grow consistently for decades to come. What happened? The adoption of energy-intensive artificial intelligence (AI) technologies.

Let's see what this could all mean for two nuclear energy stocks in particular right now.

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"U.S. power consumption, which hit its second straight annual record high in 2025, will rise further in 2026 and 2027, driven by AI-hungry data centers and electrification," reports Reuters. "Demand is surging in large part due to data centers dedicated to artificial intelligence. ... Electricity ​demand growth is led by an increase in the commercial sector, which is expected to outpace residential demand in 2026 for the first time on record."

To meet this growing demand for electricity, new energy-generating infrastructure will be needed. In fact, a massive amount of new energy sources is required to power the build-out of AI data centers globally. For this reason, many Wall Street experts are increasingly bullish on nuclear energy.

"A lack of capital is not the most pressing bottleneck for AI progress -- it's the power needed to fuel it," concludes a recent report from Goldman Sachs Group. "The next five years will require an 'all-in' approach as hyperscalers and data center operators leverage a combination of power sources like natural gas and renewables -- or go 'behind the meter' -- to meet short-term demand, while investing in long-term solutions like nuclear energy."

Want to make sure your portfolio benefits from the so-called nuclear renaissance? There are two nuclear stocks that should top your research list. But only one is likely the right fit for you.

These two nuclear stocks are riding the AI wave

When it comes to meeting the AI industry's need for more power, small modular reactors (SMRs) should play a key role. In a nutshell, SMRs are miniature nuclear power plants. They have smaller footprints and can be built faster and more cheaply than conventional nuclear power plants, and more energy-generating modules can be added to increase output capacity.

"If commercialized, SMRs would offer five major advantages over conventional, large-scale nuclear power plants," concludes Bank of America. Those advantages are lower upfront costs, enhanced safety, modularization, smaller physical footprints, and reduced carbon dioxide production.

Many companies around the world are pursuing the development of SMRs. But many of these companies are either private or diversified conglomerates. There are, however, two stocks in particular that offer pure exposure to SMRs: NuScale Power (NYSE: SMR) and Oklo (NYSE: OKLO).

Whether you go with NuScale or Oklo depends on how you think SMRs will meet AI's rising demand for power. NuScale is focused on larger, utility-scale deployments. Its biggest projects are direct partnerships with major utility companies. In this way, NuScale is betting that most AI data centers will seek to connect to the grid in a conventional manner. By selling directly to utilities, NuScale believes it can best meet AI's rising need for electricity, albeit in an indirect way.

Oklo is making a more direct approach by selling its systems directly to AI data centers. It has several major data center operators in its project pipeline, and its systems will be located directly next to their data centers. This way, data center companies won't need to rely strictly on grid connections for power. They can produce their own power onsite, cutting out the middleman of a utility.

There are pros and cons to each approach. And many investors may wish to invest in both companies to diversify their risk. But if you believe that data centers will largely rely on grid connections for power in the decades to come, NuScale is the more obvious choice. But if you see deep-pocketed AI firms looking to secure more direct sources of power, Oklo arguably has the lead. The choice depends on your vision of how the power landscape will develop.

Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool recommends NuScale Power. The Motley Fool has a disclosure policy.