In today’s issue:
- The tech of tomorrow is moving shares prices today
- Being early can be difficult, but nuclear is an example of it working well
- The theme we think could be “the next nuclear”
Last week I wrote to you about the big news in Big Tech: Google and Amazon were going big on new nuclear technology, sending the share prices of nuclear stocks up big time.
The announcements from the tech giants centred specifically on SMR technology, or small modular reactors to give them their full name.
These are the advanced type of nuclear reactor with a much smaller footprint than traditional reactors, meaning they can be built closer to the grid. They also have faster construction times, allowing them to come online sooner.
And it sent a recommendation Sam Volkering and I made over at Southbank Growth Advantage just three weeks ago soar over 100% from our buy price, having jumped 40% in just a single day last week. Doing that, it joined another of the service’s previous nuclear recommendations in moving into a triple-digit percentage return.
Nuclear has been a key theme for myself and other investment directors at Southbank for a couple of years now. (It’s worth looking at what my colleague Sam has recently had to say on the subject here – in particular an under-the-radar opportunity for investors interested in the space.)
In fact, one of my first recommendations in the sector came way back in 2019, with BWX Technologies.
At the time, I wrote this:
Nuclear is crucial and will be a much-needed source of zero-carbon technology in the years and decades to come. But perhaps not in its present iteration of building massive, centralised and vastly expensive plants. Indeed, while old stations are reaching the end of their life, new stations are incredibly expensive to build and operate. In fact, the future of nuclear power plants concerns the unheard of technology at the centre of last week’s BEIS release: the SMR, a small modular reactor.
The months that followed didn’t offer much reward. Nuclear stocks (in the NLR ETF, purple) recovered from the Covid crash, but little better:
Source: Koyfin
Five years later, BWX is up 150% and SMRs have hit the mainstream. Since the start of 2023, things have really taken off:
Source: Koyfin
As I’ve stated previously, here at Southbank we pride ourselves on being ahead of emerging trends. This often means being early; sometimes too early. And it often makes our ideas seem crazy, unlikely, or just plain wrong.
Nuclear is a case in point. It has been key theme in our investment strategies for years, and it’s now paid off. And it wasn’t just me. Back in 2022, my colleague Nick Hubble declared that the “second nuclear age has begun”.
Meanwhile, as recently as July of this year, key global agencies such as the Australian Energy Agency predicted that small modular reactors wouldn’t be relevant until the late 2040s – another 20-plus years.
Certainly, two of the “Magnificent Seven”, Amazon and Google, as announced earlier this month, are expecting their SMR projects to power their data centres long before then. However, it’s clear there still remains a winding road to get these plants built.
It’s these deals that have brought tomorrow’s technologies to today’s news – and today’s stock markets.
Nuclear now but next up…
In the vein of being early though, I’m not here to tell you any more about nuclear. That story has broken and the trend has good momentum, but that’s a known theme now.
No, I’m already thinking about what’s next, and building a portfolio of recommendations to help our subscribers potentially benefit from the next big move.
Maybe people might once again think it’s “too early, too crazy or just plain wrong”, but I see huge potential for this specific sector. It brings together the AI data centre story, as well as other key energy transition technologies.
It could be even more pivotal than nuclear to the AI and energy megatrends that are currently unfolding. Unlike nuclear though, it’s going massively under the radar right now.
But as I mentioned earlier, it’s actually one of the best-performing sectors in the markets this year, beating semiconductors, weight-loss giants AI and tech.
To find out what it is, click this link now.
Until next time,
James Allen
Contributing Editor, Fortune & Freedom
