Finding the next big thing is easier said than done when it comes to the most significant and powerful themes in the global economy. Those who were early enough to the semiconductor boom born out of the artificial intelligence race are familiar with the effort and courage it takes to back an idea, or commercialize it, before it pops in the entire stock market.
However, one area in the energy sector has all the characteristics of being one of the next booms in the global economy. The rate of fossil fuel dependency creates an inevitable opportunity for a massive shift in the years to come. The only reasonable alternative to replacing fossil fuels today is nuclear energy, not solar or wind, due to its renewable and scalable capabilities.
While nuclear energy has a bad reputation today due to past incidents, investors tend to overlook the technology's significantly improved performance over the past few decades. This is why maintaining a diversified list of nuclear names can be a key component of a well-rounded portfolio.
Names like Constellation Energy (NASDAQ:CEG) Corp., Cameco Corp (TSX:CCO)., and even NuScale Power Corp. are great additions for this massive race to alternative energy.
Considering these tailwinds for the broader nuclear industry, investors may look for companies that have already proven their services and concepts in the marketplace. This is where Constellation Energy steps in, as its size and scale make it one of the safest investment options in this race.
With a market capitalization of just under $100 billion today, the market consensus is that Constellation is the leader in terms of financial expectations and market share for providing nuclear power. Fundamentally, these expectations are true since Constellation is the largest nuclear energy presence in the United States today.
This size and market share allowed Constellation to collaborate with one of the biggest names in technology. Meta Platforms Inc (NASDAQ:META). has signed a 20-year contract with Constellation to power the technology giant's facilities in Illinois, a proof of concept and service that may lead to new technology deals in the future.
If other large companies decide to join Meta, this could mean millions (if not billions) in potential new revenue for Constellation Energy, which may be one of the expectations driving the stock near its 52-week highs today, showcasing bullish momentum moving forward.
When it comes to finding the next Constellation, investors need to focus on current market share growth and contract interest from government and other entities moving forward, and this is where NuScale can offer some opportunities.
The Nuclear Regulatory Commission (NRC) has recently extended its agenda, calling for a higher quota in development efforts stemming from small nuclear reactors within the United States, where a company like NuScale can potentially secure new deals.
Knowing that the odds may fall in favor of NuScale, some on Wall Street have decided to act on the expectations for the future, such as Citi analyst Vikram Bagri, who decided to place a new valuation target of $46 per share on NuScale stock to call for not only a new 52-week high breakout but also a 28% upside potential from today's prices.
Betting on the future potential for NuScale and its mix in the contracts space for nuclear energy, institutional buyers from the Vanguard Group decided to boost their NuScale stock holdings by 6.1% as of early May 2025, bringing their entire stake up to $126.6 million today or 3.2% ownership in the company as a vote of confidence.
Whether Constellation appears to be an unmovable giant or NuScale too speculative and reliant on new contracts, investors can always move up the value chain in the nuclear space to land on Cameco Corp (NYSE:CCJ). Being a uranium supplier has its benefits since Cameco will be the one to be paid first when nuclear demand trends likely higher.
This positioning will help reduce some of the speculation and keep the exposure at the top of the chain regarding uranium, which the markets are already beginning to price in for future demand potential. Since Cameco now trades at 96% of its 52-week high, the consensus price action confirms the "first in place" position that Cameco holds.
More than that, a new $100 price target from Andrew Wong (a Royal Bank of Canada analyst) would also call for a new breakout in Cameco into a new 52-week high while promising an additional 38% upside from where it trades today; something investors should keep in mind when building their nuclear portfolio.