Nuclear Renaissance May Drive Multi-Billion Dollar Contracts

The UK-US Technology Prosperity Deal has announced plans to build 12 advanced nuclear reactors in northeast England, potentially creating a pipeline worth billions for U.S. nuclear operators. Constellation Energy (CEG) and Vistra Corp (VST) have seen significant gains, with VST reportedly up approximately 75% year-to-date as investors position for potential contracts from providing reactor technology and operational expertise. Some analysts suggest BWX Technologies (BWXT) could be well-positioned as one of the few companies currently manufacturing and delivering small modular reactor components while competitors remain in development. Trading at what some estimate to be below historical valuation highs despite recent earnings performance, BWXT could offer exposure to nuclear expansion with potentially less technology risk.

A uranium supply situation appears to be developing that some analysts believe could push prices from current levels around $87 toward $100 per pound or higher. The deal's stated goal for UK independence from Russian nuclear fuel by 2028 could create substantial government-backed demand for North American producers. Cameco (CCJ) has announced plans to ramp production to 25 million pounds annually, while Centrus Energy (LEU) currently stands as the only U.S. producer of HALEU fuel required for next-generation reactors, with Department of Energy contracts that could potentially extend through 2034.

AI Infrastructure and Quantum Computing Could Create New Market Leaders

The nuclear buildout appears connected to expanding AI infrastructure needs. Nvidia's reported deployment of 120,000 Blackwell GPUs across the UK – described as its largest European rollout – could require power equivalent to small cities. This potential capacity challenge has contributed to gains in data center REITs like Equinix (EQIX) and Digital Realty (DLR). DLR currently offers approximately 3.5% dividend yield with reported gains of around 48% over the past year, potentially providing both growth and income as GPU deployments may require substantially more power and cooling than traditional servers.

The quantum computing sector could see increased interest following the establishment of joint government benchmarking taskforces. IonQ (IONQ) recently announced a $1.075 billion acquisition while D-Wave Quantum (QBTS) has reported significant revenue growth, with systems that the company claims can complete certain calculations far faster than classical computers. Government validation could potentially trigger increased institutional interest in a sector that has seen substantial retail trading activity.

Microsoft's announced $30 billion UK commitment – reportedly its largest investment outside the U.S. – could position the tech giant across the AI value chain. Plans to build the UK's largest supercomputer with 23,000 GPUs while partnering with OpenAI's Stargate UK project may offer exposure to AI infrastructure growth at what some consider more reasonable valuations compared to certain speculative AI stocks.

Industrial suppliers could potentially benefit as well. Vertiv Holdings (VRT) provides cooling systems for data centers, while Eaton (ETN) has reported substantial order backlogs. These companies, often trading at lower P/E ratios than tech stocks, are seeing increased demand as data center capacity expansion typically requires significant mechanical and electrical systems investment.