After five years of closure, the Three Mile Island nuclear power plant is set to reopen. Known for the infamous 1979 partial meltdown that cemented its place in the annals of anti-nuclear activism, the plant is now being revived due to a shift in economic and energy trends.
At the core of the nuclear industry’s resurgence is the rising demand for electricity. The rapid expansion of power-hungry AI-driven data centers, combined with government initiatives promoting a transition from fossil fuels to electric power, has made it essential to boost electricity generation – and nuclear energy is once again becoming a key player in this landscape.
Watching the electric utility stocks for J.P. Morgan, analyst Jeremy Tonet writes of the sector’s growing shift toward nuclear, “We see structural tailwinds, including manufacturing onshoring, broader electrification trends (transportation, heating, and more), as well data center development underpinning a paradigm shift in power demand. We do not see competitive market supply growth matching this demand, enabling IPPs to capture outsized margins for an extended period of time,” Tonet explained. “More specifically, we see burgeoning hyperscaler demand growth focused on firm, carbon-free power, transforming nuclear power into a unique, scarce offering that will command a substantial premium.”
Following from this, Tonet goes on to recommend three nuclear power stocks for investors to buy – now, as the industry is beginning to power up. According to the data from TipRanks, these are all Buy-rated equities that have seen recent strong share appreciation – yet Tonet sees more upside ahead. Here are the details.
Talen Energy (TLN)
We’ll start with Talen Energy, a major independent power and infrastructure company on the North American scene. Talen was founded in 2015, and in its near-decade of business, which has already included bankruptcy in 2022 and restructuring the following year, has expanded to reach a market cap of $9 billion. The company focuses on delivering power generation that is both safe and reliable, providing investors with the most value for every megawatt of energy produced.
Talen’s power generation portfolio includes all of the major assets behind the U.S. electric grid: natural gas, coal, oil, and nuclear. The firm’s operations are built around its Susquehanna nuclear power plant, the nation’s sixth-largest operating nuclear power facility. Talen’s total portfolio has operations in five states—Maryland, Pennsylvania, New Jersey, Massachusetts, and Montana—and has a total of 10.7 gigawatts of power generation. Of that total, 2.2 gigawatts, or more than 20%, comes from the Susquehanna plant.