Nuclear is a second-order AI infrastructure trade.
By Vlad from Bastion on
I read Morgan Stanley’s “The Atomic Steppe” and pulled out five takeaways for investors.
1️⃣ AI needs continuous power
Data centers consume large amounts of electricity around the clock. Nuclear plants operate near full output for most of the year, with a capacity factor of approximately 93% and maintenance outages scheduled in advance.
This makes nuclear power suitable for the continuous and predictable electricity demand created by AI infrastructure.
2️⃣ Existing nuclear assets could benefit first
New reactors require enormous investment and take years to complete. Restarting existing capacity can potentially provide electricity sooner and with lower execution risk.
Constellation signed a 20-year agreement with Microsoft to restart Three Mile Island Unit 1, which was closed in 2019 because it was no longer profitable.
AI demand can turn dormant nuclear capacity into contracted cash flow. The earliest beneficiaries may be owners of operating or restartable reactors, rather than developers whose projects remain years from generating electricity. $CEG
3️⃣ Energy security is becoming as important as decarbonisation
Government support for nuclear power is no longer based only on reducing emissions. Nuclear energy also reduces dependence on imported fuels, weather conditions and geopolitically unstable suppliers.
China has almost 40 reactors under construction. The US is offering $17.5 billion in low-interest loans to accelerate the construction of ten reactors.
Nuclear power is becoming strategic national infrastructure.
4️⃣ Concentrated uranium supply could strengthen pricing power
~100 new nuclear plants are currently planned worldwide, nearly matching the number built during the previous 20 years.
Meanwhile, uranium supply is highly concentrated. Kazakhstan produces approximately 39% of the world’s uranium, giving it a larger share of uranium production than OPEC has of global oil supply.
If reactor construction accelerates, rising demand will meet a concentrated supply base.
5️⃣ The most popular nuclear stocks may not offer the best risk-reward
Morgan Stanley argues that the favorable nuclear outlook is already aggressively priced into many Canadian and US companies, while Kazakhstan remains an overlooked beneficiary.
The report does not mention Kazatomprom directly, but the implication is difficult to miss. $KAP is the world’s largest uranium producer and trades a 9x forward earnings, compared with 56x for Cameco $CCJ.
That discount reflects real geopolitical and governance risks. However, the upside potential is difficult to ignore. Kazatomprom ranks in the top 2% of our global universe according to Bastion’s Growth and Efficiency at a Reasonable Price rating.