The nuclear energy stocks have really come in over the past month, and while the appetite for such plays that are doing their part to fuel the nuclear renaissance might be fading, patient dip-buyers might finally have a chance to pounce, as not a whole lot has changed about the long-term thesis with the AI revolution continuing to power forward. If the Iran conflict resolves in as little as two weeks’ time, investors should prepare for AI headlines to start flowing in again.
And while the nuclear energy plays might still have a bit more room to move lower, especially if the S&P 500 isn’t finished with its pullback yet (some think the 5,000 level could be put to the test in the coming weeks and months), I’d still treat the latest dip as a long-term buying opportunity, even if it means running the high risk of losing big money over the shorter term.
In any case, here are two nuclear energy plays that might be worth tracking down on recent weakness.
Constellation Energy
Constellation Energy (NYSE:CEG | CEG Price Prediction) stock tanked close to 7% on Tuesday, thanks in part to an Investor Day that failed to impress. With a muted earnings outlook and a lack of overall excitement (no big deals to disclose), it really felt like there wasn’t much to see at the event that was supposed to excite. Either way, I’d view the latest plunge as more of an opportunity to buy than to run for the hills.
With the company reportedly asking regulators to help speed up the Three Mile Island reboot, there may be jitters of potential delays due to bottlenecks. Indeed, the last thing investors want is for such an ambitious project to be pushed out by some number of years (perhaps to 2031). Either way, longer-term investors shouldn’t make too much of the matter, especially as the seasoned management team looks to get on it.
At the time of this writing, the stock is down more than 30%. And while the stock might still be rich at 37.7 times trailing price-to-earnings (P/E), I still view the name as one of the bluest blue chips to bet on the AI-driven nuclear boom.
Oklo
For investors comfortable with taking on extreme risk for a shot at outsized gains, Oklo (NASDAQ:OKLO) stock might make sense to check out now that the stock has gone bust.
Shares have already imploded by more than 71%. And, as I warned in prior pieces, the excessive euphoria eventually led to panic and despair. Now that the nuclear energy innovator isn’t making headlines as much, I think it might be time to pounce if you were interested when shares were close to their peak over six months ago.
So, why is the name down so much in such a short timeframe?
The latest quarter wasn’t great. But for a pre-revenue company, I’m really not too sure what investors were expecting. The impressive surge in the stock may have set Oklo up poorly, as it seemed unlikely that such a quarter would see fireworks.
Combined with insider selling activity (that’s prudent, given how far the stock had run) and a broader distaste for high-multiple growth stocks, especially those that aren’t yet profitable, it’s no mystery as to why Oklo stock has been up against it. While the valuation is still excessive, with some analysts souring on the stock, I still think there’s a case for acting as a contrarian right here as hype surrounding AI and nuclear continues to wind down.
The company faces big tests in the second half. If its reactor delivers, the stock could come roaring back. But, at the same time, there’s no telling how low the name could go if there are more setbacks in the cards. The stakes still seem way too high for most investors.