Investors Bet on a ‘Golden Age’ of Nuclear as Big Names Move In

Institutional and retail investors are increasingly eyeing nuclear energy as a long‑term growth sector, driven by government support, energy‑security concerns and forecasts for higher global capacity.

Bankers at Goldman Sachs project global nuclear generating capacity will rise to about 575 gigawatts by 2040 from roughly 378 gigawatts today, lifting nuclear’s share of global electricity to about 12 percent from 9 percent. That outlook, and a wave of government subsidies and guarantees, has helped lift shares in several nuclear‑linked companies and renewed interest in uranium and small modular reactor technology.

Major publicly traded names are positioning for the expected expansion. Rolls‑Royce, historically an aerospace and defence manufacturer, has won government approval to lead development of the United Kingdom’s first small modular reactors (SMRs) and has said it aims to build 400 of the units by 2050. The company has said each SMR would cost about $3 billion. Rolls‑Royce shares have more than doubled in value this year as investors priced in the opportunity. Jefferies set a new target price for the stock this week, reflecting heightened analyst optimism.

Centrica, the owner of British Gas, has committed about £1.3 billion for a 15 percent stake in the Sizewell C project in East Suffolk, part of a broader Government pledge of £14.2 billion to support the ten‑year development. Sizewell C is designed to supply electricity for millions of homes for decades; the project has been central to the U.K.’s plan to secure low‑carbon baseload generation. Centrica’s shares rose on news of the investment, but analysts caution that major projects of this type carry construction and cost‑overrun risks.

Investor interest is not confined to established energy utilities. In the United States, technology and cloud operators that require steady baseload power have also driven attention to nuclear. The Three Mile Island plant, officially shut down in 2019, is being repurposed in part to supply data‑centre demand. Constellation Energy, the plant’s owner, has seen its stock climb sharply over the past year.

Start‑ups are drawing capital as well. Oklo, a U.S. company designing advanced SMRs, has seen its shares surge this year amid investor enthusiasm and early support from high‑profile backers. Bank of America has set a price target on the stock, noting the firm’s novel approach to recycling certain nuclear wastes into fuel. Oklo and others, however, do not expect first commercial operations until the end of the decade or into the 2030s, underscoring the multi‑year horizon required to realise returns.

Uranium, the fuel for nuclear fission, has also returned to investor view after a period of price weakness. Companies that hold physical uranium or invest in miners — including specialist trusts and exchange‑traded funds such as Global X Uranium and Sprott Uranium Miners — provide exposure to the commodity. But the uranium market can be volatile: one London‑listed uranium holder was heavily shorted during price downturns this summer, illustrating the sector’s risk profile.

Not all companies linked to nuclear are pure plays. EDF, the French state‑owned utility that runs eight U.K. nuclear plants, remains a key operator in European nuclear generation, but its projects have been marked by delays and rising costs — for example, Hinckley Point C has seen its timetable moved and costs escalate, with new output now expected later in the decade. Westinghouse, a longstanding U.S. nuclear technology firm, has also navigated restructurings and ownership changes; shares of companies in the supply chain have been volatile but generally higher over the past year.

Analysts and asset managers urged caution. David Coombs at Rathbones noted that nuclear was widely shunned only a few years ago and that investors must take long views because large projects and SMR rollouts will take years to generate revenue. He added that nuclear provides the uninterrupted baseload that intermittent renewables cannot, a factor influencing energy planners.

Political and operational risks remain salient. High‑profile nuclear accidents such as Fukushima and Three Mile Island have left lasting public sensitivities. Construction disputes, permitting delays and budget overruns are common. The Sizewell C programme, while backed by the U.K. government, has generated controversy over cost and timetable assumptions. Meanwhile, other forms of clean energy have also encountered setbacks: companies that led the offshore wind charge have faced losses tied to specific market and policy conditions, a reminder that sector leadership can shift.

Financial advisers and fund managers have responded to demand with a range of products that provide different levels of exposure, from single‑company equities to diversified ETFs and investment trusts focused on nuclear energy and uranium mining. For investors who prefer lower concentration risk, diversified funds offer a way to participate in the sector without selecting individual names, though fees and portfolio composition vary.

Market participants say the case for nuclear rests on two broad pillars: governments’ desire for energy security and the role of low‑carbon baseload generation in meeting net‑zero goals. Bank forecasts and company targets assume sustained policy support and a stable regulatory environment. If those assumptions hold, the industry could expand meaningfully over decades; if not, the sector will likely remain cyclical and capital‑intensive.

For now, nuclear has returned to mainstream investor conversation. The industry’s revival is attracting established industrial groups, utilities and new entrants alike, but the timeline to commercial scale — and the pathway to profitable returns for shareholders — is measured in years rather than months. Investors weighing exposure should consider technological timelines, project execution risks and the evolving policy landscape that will determine how quickly forecasts translate into operating capacity.