Nuclear energy is becoming increasingly important for powering next-generation data centers.
Big tech companies have signed multiple purchasing agreements with nuclear power suppliers.
Oklo is one of the biggest beneficiaries of the nuclear energy opportunity.
10 stocks we like better than Oklo ›
Artificial intelligence (AI) stocks are by far the hottest theme in the capital markets. As is often the case with megatrends, tangential opportunities began to emerge—bringing curiosity to anything involving artificial intelligence.
One of the adjacent AI opportunities that is gaining traction is nuclear energy. While nuclear power is becoming increasingly important for next-generation data centers, investor interest in this area of the energy industry may be overextended. Nuclear energy ETF stocks have been outperforming other stocks throughout the AI revolution S&P 500 Index(SNPINDEX:^GSPC).
URA data provided by YCharts
Let’s explore the catalysts driving nuclear energy stocks and learn how these companies could play a central role in the era of artificial intelligence infrastructure. From there, I’ll dive into why I’m particularly bearish Oklo(NYSE:OKLO) Stocks heading into 2026.
Considering the speed at which big tech companies are developing generative AI applications, it’s no surprise that data centers consume a lot of power.
According to the U.S. Department of Energy (DOE), data centers will account for approximately 4% of U.S. electricity by 2023. However, given the rapid acceleration of investment in AI infrastructure, the Department of Energy projects that this number could triple by 2028.
To curb rising energy costs, hyperscalers are turning to alternative energy sources. Unlike wind and solar, nuclear power is unique in that it is cheap and can operate continuously. This brings a degree of stability, scalability and cost predictability that is much needed in the energy sector.
Last year, a number of tech giants signed deals with nuclear energy companies.
Last September, Microsoft Sign a purchase agreement with Constellation Energy A 20-year partnership that includes restarting the nuclear reactor at Three Mile Island.
Back in June, meta platform It also signed a 20-year cooperation agreement with Constellation Energy. As part of the coalition, Mehta gained access to the Clinton, Illinois, nuclear facility.
October, letter sign agreement with next generation energy Purchase electricity from the Duane Arnold Energy Center.
Amazon Web Services (AWS) has power purchase agreements with Talen Energy These include the cloud giant’s visit to Pennsylvania’s nuclear facilities and the potential development of its own small modular reactor (SMR). Additionally, AWS works with Dominion Energy A separate SMR program.
Nuclear energy stocks have soared amid media reports surrounding various deals with big tech companies. While this momentum may be tempting, smart investors understand there are more details to unravel.
CEG data provided by YCharts
For now, partnerships with big tech companies are little more than agreements and promises of the future. In other words, these deals haven’t taken effect yet, and many won’t actually power data centers until the second half of the century.
In my view, the gains in nuclear energy stocks shown above already reflect optimism about the future. The nuclear energy movement appears to be based largely on narratives of hope and potential rather than concrete business fundamentals. This is similar to how Internet stocks were traded in the early days of the late 1990s.
To be clear, I’m not saying the entire nuclear energy opportunity isn’t worth investing in. Instead, investors need to be smart about which companies they choose and why.
In the section above, Oklo’s 955% share gain is by far the highest of its kind shown in the chart. However, looking at its percentage gain doesn’t reveal much about the company’s underlying valuation.
To help determine whether Oklo is becoming a bubble stock, look at valuation ratios like price-to-sales (P/S) and price-to-earnings (P/E). Spoiler alert: We can’t do that because Oklo doesn’t generate revenue and the company continues to burn cash to achieve its ambitions.
I find it hard to justify Oklo’s $16 billion market cap when it doesn’t yet have a real product or actual paying customers. Instead, Oklo has attracted interest from government agencies and other businesses that could one day become actual sources of revenue. But to do this, companies need to build, market, commercialize and monetize their services.
Against this backdrop, I do think nuclear energy will be the backbone supporting the broader AI infrastructure boom over the next five years. That being said, I think time will tell which companies actually last and which ones collapse – as happened during the dot-com bubble burst in the early 2000s.
By 2026, I think investors will witness a sharp correction in some nuclear stocks – with Oklo being by far the most vulnerable stock in my opinion.
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Adam Spatacco has worked at Alphabet, Amazon, Meta Platforms, Microsoft and Nvidia. The Motley Fool owns and recommends Advanced Micro Devices, Alphabet, Amazon, Constellation Energy, Meta Platforms, Microsoft, NextEra Energy and Nvidia. The Motley Fool recommends Dominion Energy and NuScale Power, and recommends the following options: long January 2026 $395 Microsoft calls, and short January 2026 $405 Microsoft calls. The Motley Fool has a disclosure policy.
Prediction: Stock Market Bubble Will Burst in 2026, 1 Hot Stock Will Crash (Hint: Not Quantum Computing) Originally published by The Motley Fool
