Investors Bet on Nuclear as Governments Push a ‘Golden Age’ of Power

Global investment interest in nuclear energy has surged as governments and banks forecast a sizable expansion of atomic capacity and companies position to supply reactors, fuel and services.

Goldman Sachs projects global nuclear generating capacity will rise to about 575 gigawatts by 2040 from roughly 378 gigawatts today, increasing nuclear’s share of electricity supply to about 12 percent from around 9 percent. That outlook, and renewed emphasis on energy security and low‑carbon baseload power, has helped lift shares in several nuclear‑exposed companies this year.

Market activity has clustered around three themes: large utilities and energy groups tied to new build projects, industrial groups developing small modular reactors (SMRs), and financial instruments that provide exposure to uranium and mining companies. In the U.K., the government has pledged roughly £14.2 billion toward the Sizewell C project in Suffolk, a decade‑long development that backers say could generate power for about 6 million homes for decades. Centrica, the operator of British Gas, agreed to invest about £1.3 billion for a roughly 15 percent stake in Sizewell C, a move that helped lift its shares when the deal was announced.

Aerospace and defence group Rolls‑Royce has become a prominent corporate bidder for the SMR market, saying it aims to build as many as 400 reactors by 2050 with unit costs in the range of $3 billion. Chief Executive Tufan Erginbilgic told investors the company believes it has unique private‑sector nuclear capability and is targeting global leadership. Rolls‑Royce shares have risen sharply this year, fuelled by defence work as well as nuclear ambitions; analysts remain broadly positive, with several brokerages maintaining ‘buy’ recommendations and Jefferies setting a new target price above current levels.

Asset managers and independent analysts caution that returns depend on long timelines and execution at scale. David Coombs of Rathbones noted that enthusiasm has shifted markedly in recent years but warned SMRs are unlikely to be operational until the 2030s, meaning investors must take a long view. Construction delays and cost overruns on large projects remain a drag on the sector: EDF’s Hinckley Point C and other major builds have suffered schedule slippages and rising budgets.

In the United States, both start‑ups and established utilities are in investors’ sights. Constellation Energy, owner of the Three Mile Island site where commercial operations ceased in 2019, saw its shares jump as demand for reliable baseload power — including from large data‑centre operators — has re‑emerged. Oklo, a U.S. start‑up designing SMRs and backed in its early stages by technology investors, has seen rapid gains in its stock this year amid excitement about novel reactor designs and plans to use spent fuel as a feedstock for some designs. Bank of America has published a target price for Oklo that is above recent market levels, although the company’s first commercial units are not expected until later in the decade.

Investors seeking exposure to the nuclear fuel cycle have driven interest in uranium stocks and funds. Uranium holding companies and exchange‑traded funds that track uranium miners and producers have experienced periods of strong performance and volatility. Yellow Cake, a London‑listed firm that holds uranium assets, attracted heavy short interest during a recent pullback in the uranium price before recovering as markets rebounded. Passive and specialist vehicles such as Global X Uranium, Sprott Uranium Miners and the Geiger Counter investment trust offer routes to gain diversified exposure to the commodity and miners.

Industry observers point to both demand and supply dynamics underpinning the market case for nuclear: policymakers seeking energy security and decarbonisation have encouraged investment while years of underinvestment in new reactors kept capacity growth modest. Goldman Sachs’s projection reflects both renewed policy support and planned deployments of SMRs and large reactors in Europe, North America and parts of Asia.

But cautionary examples remain. The build‑out of large plants has a history of delays and cost increases, and high‑profile incidents in the past still shape public attitudes. The Danish offshore wind developer Ørsted — once a market favourite in renewables — has faced turmoil in recent years tied to difficult U.S. operations and a large rights issue, a reminder that energy transitions can create concentrated winners and losers. Analysts say nuclear investments carry similar project, regulatory and political risks, and that returns are likely to be uneven across companies and geographies.

For retail investors, exposure can be obtained either through direct equity positions in utilities, manufacturers and developers, or via funds that specialise in nuclear energy and uranium. Brokerages and platforms including AJ Bell, Hargreaves Lansdown, interactive investor, InvestEngine and Trading 212 provide access to many of those stocks and ETFs. Some wealth managers and asset managers recommend diversified funds for those who want exposure without single‑stock risk; others say selective positions in firms with clear contract backlogs or government support may reward patient investors.

Analysts and fund managers recommend that investors factor in long development timetables, the potential for regulatory change and the possibility of further cost escalation. While many market participants describe the current period as a renaissance or a golden age for nuclear, the scale‑up envisioned by proponents will require sustained policy support and a track record of on‑time, on‑budget delivery before expectations are fully met.