AI-Powered Nuclear Energy Stocks on the Rise

  • Industrial pump and valve maker Flowserve is considered a hidden nuclear energy play by BofA analyst Andrew Obin
  • Nuclear business accounts for 3-4% of Flowserve’s total sales but is more profitable than the average
  • Flowserve stock trades at 16 times estimated 2025 earnings compared to S&P 500’s 21 times
  • 64% of analysts covering Flowserve shares rate them as Buy, higher than the S&P 500 average of 55%
  • Flowserve stock up 4.4% in early trading after BofA report
  • Microsoft and Constellation Energy partner to restart Three Mile Island nuclear power plant
  • Constellation Energy shares up 117%, Vistra shares up almost 200% year-to-date
  • Data center provider Vertiv’s shares up 99% YTD, GE Vernova’s shares up over 100% from April spinoff levels
  • Nvidia’s shares gain 136% YTD in AI chip market
  • Flowserve stock has gained 22% so far in 2024 with potential for more growth

Technology giants are increasingly relying on nuclear energy to power their data centers, leading to a surge in related stocks. Analyst Andrew Obin of BofA identifies industrial pump and valve maker Flowserve as a hidden nuclear energy play due to its profitable nuclear business. With only 3-4% of total sales coming from nuclear operations, the company’s stock has seen gains after the analyst’s recommendation. Other companies benefiting from this trend include Vertiv, GE Vernova, and Nvidia.

Factuality Level: 8
Factuality Justification: The article provides accurate and objective information about the technology giants’ interest in nuclear-based electricity for their data centers and its impact on related stocks. It discusses the potential benefits of investing in companies like Flowserve, Microsoft, Constellation Energy, Vistra, GE Vernova, and Nvidia due to this trend. The article also includes relevant financial data such as stock prices and analyst ratings.
Noise Level: 3
Noise Justification: The article provides relevant information about technology giants seeking nuclear-based electricity for their data centers and its impact on related stocks. It also mentions specific companies benefiting from this trend. However, it lacks in-depth analysis or exploration of the long-term consequences and does not offer significant actionable insights.
Public Companies: Flowserve (FLS), Microsoft (MSFT), Constellation Energy (CEG), Amazon.com (AMZN), Talen Energy (TLN), Vistra (VST), Vertiv (VRT), GE Vernova (GE), Nvidia (NVDA)
Key People: Andrew Obin (Analyst)

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Financial Relevance: Yes
Financial Markets Impacted: Technology, utility, and industrial sectors
Financial Rating Justification: The article discusses the impact of technology giants’ demand for clean, uninterrupted nuclear-based electricity on financial markets and companies such as Flowserve, Constellation Energy, Talen Energy, Vistra, Vertiv, GE Vernova, and Nvidia. It also mentions stock price changes and investor interest in nuclear energy plays related to AI data centers.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no mention of any extreme event in the article.
Move Size: The market move size mentioned in the article is 4.4% for Flowserve stock and about 186% for Talen Energy shares year to date.
Sector: Technology
Direction: Up
Magnitude: Large
Affected Instruments: Stocks

Reported publicly: www.barrons.com