Nvidia CEO Jensen Huang says AI computing needs far more energy than exists today. The Motley Fool argues that slower data center construction could hurt small modular reactor developers Oklo and NuScale Power, whose shares are both down more than 60% this year.
Nvidia CEO Jensen Huang said earlier this year that the energy AI computing needs is "likely probably 1,000 times more than we currently have". Nuclear power stocks have drawn enthusiasm from that need, but the Motley Fool's Ryan Vanzo sees risks for two of them.
AI stocks pull back on build-out worries
Despite a recent pullback, Goldman Sachs forecasts AI spending to surpass $1 trillion in 2026. The pullback was not driven by uncertainty about demand, the article says. Instead, concerns are rising about the pace of the global data center build-out, which requires community support and substantial capital.
Barclays research affirms that AI demand remains strong. The market is questioning funding, the bank says, as hyperscalers keep lifting capex while free cash flow evaporates.
Power supply becomes the constraint
Power concerns are not new. McKinsey & Co. warns that incumbents can't meet demand for power, even as capital pours into data center development.
That need has driven enthusiasm for Oklo and NuScale Power, which are both developing small modular reactors, or SMRs. On paper, these systems can be built faster and with lower initial capital requirements than conventional nuclear plants.
Why Oklo and NuScale may suffer
Bank of America's estimates don't predict real-world SMR adoption will scale meaningfully until the 2030s or even the 2040s. Both companies remain unprofitable, and full commercialization of their designs may still be years away.
Both have also sold large blocks of shares to raise cash, diluting shareholders. If the SMR build-out stretches out, the article says, more stock issuances will follow, and lower-cost alternatives such as solar, natural gas, and wind remain accessible.
Vanzo still believes in the SMR story over the long term, but writes that the investment case for SMR stocks faces mounting uncertainty.
Source: The Motley Fool
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