The AI age is Leading to the Expansion of Nuclear Energy. BWX Technologies Enables Small Modular Reactors for Data Centers!
In the USA, demand for electricity is expected to increase by around 2.4% annually until the end of the decade due to AI and reindustrialization. Data center operators in particular are looking for ways to satisfy their hunger for energy in the most environmentally friendly way possible. Amazon, Microsoft & Co. conclude power purchase agreements with green energy providers, but also rely on nuclear energy!
Last week, a deal was announced between Microsoft and Constellation Energy, whereby the "Three Mile Island" nuclear power plant in Pennsylvania will be reactivated to supply electricity. Oracle, which is currently expanding rapidly with its data centers, relies on Small Modular Reactors (SMR). These are mini power plants that generate electricity on site. Larry Ellison comments: "So we're in the process of designing a data center that's north of the gigawatt mark, but we've found the location and the power source. We see that we have already received construction permits for three nuclear reactors. These are small modular nuclear reactors that will power the data center. So that's how crazy it's getting. That's what's going on." So power consumption is increasing so significantly that it's actually becoming necessary for data center operators to rely on mini-nuclear power plants.
BWX Technologies is a beneficiary of the expansion of nuclear energy. The company develops and manufactures components such as steam generators, heat exchangers and reactor vessels for nuclear power plants and is also positioned in SMRs, which are particularly exciting for data centers. In June, the company received funding of $900 million from the Department of Energy for the development of SMRs. SMRs are dedicated to the engineering and production of reactor vessels and heat exchangers. For example, BWX also realized the reactor pressure vessel for the BWRX-300 reactor from GE Hitachi - a typical SMR.
Nuclear energy will become more important in the future. SMRs are likely to become the norm for data centers and BWX Technologies is ready to benefit as a component supplier. The company is also well positioned in nuclear propulsion systems for ships, spacecraft and radioisotopes for radiotherapy. The stock is now likely to see the next step of the upward trend!
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