This Nuclear Stock Doesn't Need a Breakthrough. It Just Won Another $189 Million Contract Doing What It's Always Done.

As electricity demand rises and energy security becomes more important, the Department of Energy is creating a pathway for advanced small modular reactors, microreactors, and the specialized fuel they need. As nuclear energy stages a comeback, investors have an excellent opportunity to invest in the growing nuclear industry.

BWX Technologies (NYSE: BWXT) doesn't need to wait for the next generation of reactors to succeed. The company has spent decades manufacturing critical nuclear components and nuclear fuel for the U.S. Navy. Its latest $189 million contract reminds us that BWXT can win by doing what it has long done best.

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BWX Technologies has been working on compact nuclear reactors for decades

Nuclear energy is enjoying a comeback, and small modular reactor (SMR) developers have been a top focus for investors. That's because SMRs could change how nuclear energy is deployed and provide off-grid power for data centers and industrial operators.

Companies like Oklo, NuScale, and X-Energy are actively working with regulators to create a pathway for these next-generation nuclear technologies. While SMRs could change nuclear energy, the technology won't be widely available commercially until the 2030s.

The concept of small, modular nuclear power is rooted in the Navy, where space constraints and durability requirements demanded compact reactor cores. U.S. Navy submarines, including Virginia-class attack vessels and Ohio-class ballistic missile submarines, rely on these specialized naval reactors to operate for decades without refueling. BWX Technologies has spent decades manufacturing these compact reactor components for the U.S. military.

BWXT is the only company that manufactures fuel for the U.S. Navy

BWXT holds a unique position as the only company licensed to manufacture both naval nuclear reactor components and specialized fuel for the entire U.S. Navy fleet of submarines and aircraft carriers.

Unlike commercial SMRs, which utilize low-enriched uranium (LEU) or high-assay low-enriched uranium (HALEU), the naval program uses weapons-grade, highly enriched uranium containing roughly 93% uranium-235.

Because of the sensitive nature of this nuclear fuel, regulatory oversight is stringent, and a special security clearance is required. Through its Nuclear Fuel Services subsidiary in Erwin, Tennessee, BWXT processes this fuel and fabricates reactor cores, giving the company an unrivaled industrial base.

BWXT's recent contract win builds on its strong backlog

On Oct. 1, the U.S. Naval Nuclear Propulsion Program awarded BWXT a contract worth about $189 million for Nuclear Fuel Services to manufacture and deliver naval reactor fuel through August 2027. This fuel directly supports propulsion systems aboard active and next-generation vessels, including Virginia-class attack submarines, incoming Columbia-class ballistic missile submarines, and Gerald R. Ford-class supercarriers.

BWX Technologies is in an enviable position as the only nuclear component and fuel supplier for the U.S. Navy and has been working on compact reactors for decades. Its massive defense backlog helps insulate it from economic downturns and provides revenue visibility for years to come.

For investors looking for exposure to the growing nuclear industry, BWX Technologies is a more compelling option than speculative SMR start-ups right now.

Courtney Carlsen has positions in NuScale Power and Oklo. The Motley Fool has positions in and recommends BWX Technologies. The Motley Fool recommends NuScale Power. The Motley Fool has a disclosure policy.