By Nigam Arora & Dr. Natasha Arora
AI is power hungry. Here are the key points:
- Big tech is concluding that solar and wind backed up by batteries is not enough.
- Big tech is committed to reducing its carbon footprint. For this reason, big tech is looking for alternatives to natural gas and coal powered power plants.
Change
Nuclear power has had false starts before, but this time may be real due to the following four changes:
- Building nuclear plants has been very expensive — it has been difficult to finance. The change is that big tech is willing to finance nuclear power.
- After the Three Mile Island accident, the public became opposed to nuclear power. Public support for nuclear power was beginning to build again when the Fukushima accident occurred. The change is that big tech has the financial resources to change the public perception of nuclear power.
- Existing nuclear plants were custom built. The change is the progress towards standardization.
- Electricity demand growth has been weak in recent years. However, AI is so power hungry that electricity demand is going to rise more steadily than in recent years.
Five Categories of Opportunities
Investors should consider dividing opportunities into five categories. Listed below are the five categories and top picks.
- Conventional Nuclear Power
- Constellation Energy Corp (CEG)
- Vistra Corp (VST)
- Talen Energy Corp (TLN)
- Public Service Enterprise Group Inc (PEG)
- Uranium
- Cameco Corp (CCJ)
- Smart modular reactors
- Nano Nuclear Energy Inc (NNE)
- NuScale Power Corp (SMR)
- Oklo Inc (OKLO)
- Nuclear Fuel
- Centrus Energy Corp (LEU)
- Lightbridge Corp (LTBR)
- Suppliers
- BWX Technologies Inc (BWXT)
- GE Vernova Inc (GEV)
Hype
The media is filled with hype and falsehoods.
Stay tuned to the Real Time Feed for more details in due course.
For strategic positions, it is important to buy when the hype dies down. For tactical positions, proper spots can be picked to buy into the hype.
NNE Position
There is an existing position in NNE. Consider continuing to hold.
Short Squeezes
A big part of the rise in nuclear stocks is due to short squeezes. We know with certainty that short squeezes ultimately end, leading to a pullback.
Buy Zones
In due course, we will be providing you with buy zones of some of the top 12 picks. Currently, due to the excessive hype, only super aggressive investors may consider scaling in very, very small quantities.
Stay tuned for more specifics. In due course, there will be better opportunities in terms of probability adjusted risk rewards.
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This post was just published on ZYX Buy Change Alert.
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Nigam Arora
Nigam Arora is known for his accurate stock market calls. Nigam is a distinguished master of the macro. He is a popular columnist with over 100 million page views, an engineer, and nuclear physicist by background. Nigam has founded two Inc. 500 fastest growing companies and has been involved in over 50 entrepreneurial ventures. He is the developer of Theory ZYX of Successful Change Management and is the author of the book on Theory ZYX, as well as the developer of the ZYX Change Method for Investing.
Dr. Natasha Arora
Dr. Natasha Arora has significant expertise in investment analysis especially biotech, healthcare, and technology. Natasha is a graduate of Harvard Medical School followed by a postdoc at MIT. She has published several peer reviewed research papers in top science journals.
