Nuclear Stocks Like NuScale and Oklo Trade Mixed on This Army Announcement

NuScale gets a boost from the Army’s new nuclear power program. (Courtesy NuScale)

Key Points

• The Army’s Janus Program will build commercially owned and operated small nuclear reactors to support national defense installations.
• Some nuclear power stocks reacted positively to the Army’s announcement, with NuScale Power up 9% and Centrus Energy up 6.8%.
• Other nuclear stocks, like Oklo and Nano Nuclear Energy, saw early gains reverse, falling 2.6% and 6.5%, respectively.

Buzzy nuclear power stocks may have found a new narrative to keep their rally going: Defense contracting.

The Army announced a nuclear power initiative on Tuesday called the Janus Program, which it described as an effort to “deliver resilient, secure, and assured energy to support national defense installations and critical missions.”

The program will build small nuclear reactors, which will be commercially owned and operated. Payments to the companies, which weren’t named, will help them “close their business cases,” the Army said.

While some nuclear stocks spiked on the news, others swung to a loss. Modular reactor maker NuScale Power was up 9% on Wednesday and Centrus Energy, which provides nuclear fuel, jumped 6.8%. Constellation Energy, the country’s largest owner of nuclear plants, rose 2.7%.

Meanwhile, Oklo and Nano Nuclear Energy rose sharply in early trading before falling 2.6% and 6.5%, respectively.

It wasn’t immediately clear why some stocks got a boost from the Army’s announcement while others sank. The divergence does, however, presage what may happen when the military awards its contracts. It’s unlikely each company will get an equal slice of the work.

Still, the defense industry’s investment in nuclear energy provides one other way these stocks can keep growing. Smaller players such as Oklo, Nano Nuclear, and NuScale generate little to no revenue but have seen their share prices skyrocket this year. The basic theory is that these companies’ small modular reactors may be the energy solution of choice for power-hungry AI data centers.

Then again, even that narrative may have pitfalls. As Barron’s reported last month, more than 80 companies around the world are competing in the nuclear reactor game.

Write to Nate Wolf at nate.wolf@barrons.com