Analyst points to Duke Energy's clean growth and Amazon’s investment in nuclear to meet power demand
Anthony Crowdell, a research analyst at Mizuho, sees opportunities in nuclear stocks, driven by rising electricity demand and growing enthusiasm for artificial intelligence (AI) and data centres.
In an interview with BNN Bloomberg on Monday, Crowdell noted that electricity demand in the US had been relatively flat for 15 to 20 years.
“Now all of a sudden you throw in this data centre AI thematic coupled with the onshoring of manufacturing here and now it’s been off to the races with utilities putting out demand growth numbers where again two to three years ago, we were zero to one per cent of demand growth,” Crowdell said.
He also highlighted a shift in demand growth. “Now we have some utilities putting out numbers about nine per cent. So, it’s just a step change in the amount of load growth that we need and also a change in the generation needs that are required to meet this new load.”
Amazon recently announced plans to invest in small nuclear reactors to meet power demands for data centres and AI, a move followed by a similar announcement from Google.
Additionally, Bloomberg News reported last month that Microsoft had agreed to pay a premium to Constellation Energy to source clean power from the Three Mile Island nuclear plant once it restarts.
Crowdell highlighted Duke Energy as a company he favours in the sector.
“A great way to define Duke is aggressive defense. It’s one of the bellwethers in this space. It struggled for years, maybe with a weaker balance sheet and unregulated operations, (but) unregulated businesses are (now) all gone. It’s the cleanest this story has been in 20 years,” he said.
“They built a nice credit cushion with the balance sheet, and they operate very well in all their jurisdictions.”
