2 Nuclear Stocks to Buy in November for Energy and AI Growth

Nuclear energy stocks have transformed into one of the hottest areas on Wall Street as investors dive into the industry ready to power the energy transition and the artificial intelligence (AI) age.

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The Bull Case for Nuclear Energy Stocks

Nuclear energy stocks from Oklo to NuScale have soared in the last few months, driven by blockbuster deals between technology giants such as Google, Microsoft, and Amazon and nuclear energy companies.

Nuclear energy is an extension of the AI trade since nuclear will play a major role in powering the energy-hungry expansion of AI.

Nuclear energy provided 50% of America’s carbon-free electricity in 2023, making it the most significant domestic source of clean energy. 

The U.S. in late 2023 headed up a coalition of countries pledging to triple nuclear energy capacity by 2050. Nuclear power plants produce maximum power more than 92% of the time, making nuclear nearly 2X more reliable than natural gas and 3X times more than wind and solar.

Even though nuclear energy stocks have surged in 2024, investors still have a chance to buy in near the ground floor of the nuclear energy renaissance that will be measured in decades.

Buy BWX Technologies Stock and Hold for Long-Term Nuclear Energy Growth?

BWX Technologies, Inc. (BWXT Quick QuoteBWXT - Free Report)  is set to release its Q3 FY24 earnings results on Monday, November 4.

BWX Technologies is a top supplier of nuclear technologies, components, and fuel to the U.S. government that’s quickly expanding its commercial nuclear power segment.

BWXT is building out its Ontario production facility that’s already one of the largest commercial nuclear equipment manufacturing plants in the world to “support ongoing and anticipated customers’ investments in Small Modular Reactors, traditional large-scale nuclear and advanced reactors, in Canada and around the world.”

BWXT has landed various key commercial and governmental nuclear contracts. BWX Technologies is helping manufacture a cutting-edge micro-nuclear reactor in partnership with the U.S. Department of Defense, and the U.S. Department of Energy selected BWXT for a High-Assay Low-Enriched Uranium (HALEU) deconversion services effort to “support the civil advanced reactor marketplace.”

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BWXT is projected to grow its adjusted EPS by roughly 6% in FY24 and FY25 on the back of 6% and 5% higher sales, respectively. BWXT has topped our EPS estimates for six quarters running and its most accurate Zacks EPS estimate for Q3 came in slightly above consensus.

BWX Technologies stock has climbed 110% in the past two years, including a 60% YTD surge to crush the Zacks Tech sector and hit new highs. BWXT stock is roughly neck-and-neck with Tech over the past decade.

Valuation-wise, BWXT trades at a 40% discount to its highs with a 4.3 PEG ratio (which factors in its long-term earnings growth outlook). BWXT will likely have to find support near its 21-day moving average or risk testing its 50-day—which would be a great entry point for more technically-focused investors.

Long-term nuclear energy bulls might want to buy BWX Technologies for its ability to work with commercial and U.S. government clients across an array of nuclear energy segments. Plus, the company pays a dividend, and six of the eight brokerage recommendations Zacks has are “Strong Buys.”

Is Constellation Energy a Must-Own Nuclear Energy Stock?

Constellation Energy (CEG Quick QuoteCEG - Free Report)  will report its Q3 FY24 earnings results on Monday, November 4.

Constellation Energy is one of the nuclear energy companies and stocks ready to play a major role in the economy and Wall Street. Constellation is the largest U.S. nuclear power plant operator, boasting over 20 reactors at roughly a dozen sites across the Midwest, the Mid-Atlantic, and the Northeast.

Constellation helped usher in the AI nuclear power age when it landed its 20-year power purchase agreement with Microsoft in September. Constellation is retrofitting its current nuclear power plants to keep them running for a lot longer, reopening decommissioned plants, and venturing into next-gen nuclear power plant technologies.

Constellation aims to grow through mergers and acquisitions and return capital to shareholders via buybacks and dividends. Constellation announced in early 2024 its plans to boost its dividend per share by 25% in 2024, exceeding its 10% annual growth target.

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The U.S. government is helping provide a price floor for nuclear power to boost the expansion of the domestic nuclear power industry. Constellation boosted its adjusted 2024 earnings guidance in early August and reaffirmed its ability to grow its adjusted earnings by at least 10% from 2024-2028.

Constellation has ripped 125% higher in 2024 (4^th best showing in the S&P 500) and over 400% since its 2022 IPO. CEG has dipped around 9% from its early October records. Constellation stock could face profit-taking pressure and possibly test its 50-day moving average depending on how Wall Street reacts to its report (and other near-term market moving factors).

Thankfully, Constellation has already cooled off significantly to trade at roughly neutral RSI levels. Constellation’s impressive long-term earnings growth outlook helps it trade at a 37% discount to its highs and 30% below the Zacks Alternative Energy industry with a 1.3 PEG ratio.