Nuclear power investment is growing rapidly. Goldman says these stocks offer ways to play it

Goldman Sachs reports a resurgence in nuclear power investment globally, citing a 14% compound growth rate since 2020 compared to 1% prior, driven by increased recognition of nuclear's role in decarbonization and favorable policy shifts. Goldman highlights Cameco (CCJ) and GE Vernova (GEV) as "buy" rated stocks offering exposure to the nuclear trend, with price targets implying 11% and 7% upside, respectively; NuScale (SMR) and Vistra (VST) are rated neutral, while Mitsubishi Heavy Industries (MHVYF) is positioned to benefit from nuclear plant restarts in Japan.

Analysis

Goldman Sachs identifies a significant resurgence in the nuclear power sector, marking an inflection point after years of underinvestment post-Fukushima. Global investment in nuclear power has surged with a 14% compound annual growth rate since 2020, a substantial increase from the sub-1% growth prior, driven by the global imperative for decarbonization and an increasingly favorable policy landscape, including recent U.S. executive orders aimed at accelerating nuclear deployment. Goldman Sachs highlights specific investment opportunities: Cameco Corp. (CCJ), a leading uranium miner with a $25 billion market cap and comprehensive exposure to the nuclear value chain, is rated "buy" with a $65 price target, suggesting 11% upside. GE Vernova (GEV), a diversified power equipment manufacturer with an approved small modular reactor (SMR) design in Canada and ambitions to add 5 gigawatts of U.S. nuclear capacity by 2030, also receives a "buy" rating and a $500 price target, implying over 7% upside. Conversely, NuScale Power (SMR), despite being the sole U.S. entity with an SMR design submitted to the NRC and expecting final certification this year, is rated "neutral" with a $24 price target, indicating 21% potential downside. Similarly, Vistra Corp. (VST), an independent power producer with 6.5 gigawatts of nuclear capacity and potential for data center power agreements, is rated "neutral" with a $134 price target, suggesting 15% downside. Mitsubishi Heavy Industries (MHVYF) is positioned to benefit from the restart and maintenance of nuclear plants in Japan, which Goldman views as a positive catalyst for the company's key nuclear business segment.

Key Decisions for Investors

• Investors should consider opportunities in Cameco (CCJ) and GE Vernova (GEV), which Goldman Sachs rates as 'buy' due to strong uranium market exposure and SMR development prospects respectively, with price targets indicating potential upsides of 11% and over 7%.
• Exercise caution or re-evaluate holdings in NuScale Power (SMR) and Vistra (VST), as Goldman Sachs assigns 'neutral' ratings with price targets implying significant potential downsides of 21% and 15% respectively, despite their specific roles in the nuclear sector.
• Monitor Mitsubishi Heavy Industries (MHVYF) for positive impacts stemming from the anticipated restart and maintenance of Japanese nuclear facilities, a key driver identified by Goldman Sachs for the company's performance.