The push by data centers to seek out clean energy sources to power their AI platforms and applications has become mainstream. Data centers are estimated to consume over 9% of all domestic electricity produced by 2030. Nuclear energy is making headlines in the oils/energy sector due to deals like Microsoft Co. (NASDAQ: MSFT) signing the largest 20-year power purchasing agreement in history with Constellation Energy Inc. (NASDAQ: CEG), who will restart a nuclear reactor on Three Mile Island. It caused uranium stocks to surge since uranium is the primary fuel source for nuclear reactors.

The market is looking for even faster, cheaper, safer ways to produce nuclear energy. Small modular reactors are mini nuclear reactors generating up to 300 megawatts (MW) that are designed to be safer and scalable as utilities can start with one and add more units as demand increases. Here are two highly speculative small modular reactor (SMR) technology stocks benefiting from the race to power AI data centers.

NuScale Power: Front Runner in the Race to Build SMRs  

As a leading developer of SMR technology, NuScale Power Co. (NYSE: SMR) is a front-runner in the race to build SMRs. The company is focused on solely installing its SMR technology inside power plant projects. NuScale’s technology has received design certification from the U.S. Nuclear Regulatory Commission (NRC). The company is partnered with ENTRA1 Energy to deploy NuScale's SMRs globally. Its standard 77-megawatt design approval application is scheduled to conclude by mid-2025.

It features the same fundamental safety case and features that were approved by the NRC in 2020. The adjustment is for a six-plant design rather than the original 12-module plant at 50 MW a piece. Its SMR manufacturer, Doosan, is making progress toward producing the first NuScale power modules needed to support the commencement of fabricating upper reactor pressure vessels. The company is positioned as a manufacturer readiness leader in the SMR space. The company engaged with 43 representatives from 22 supplier organizations collaborating on supply chain readiness.

The NuScale SMR Plant Project in Romania  

NuScale has the technology and capacity to execute and has been working with ENTRA1 on developing a model for approaching AI data centers and industries that need 24/7 clean energy. The company is seeing significant interest in Central Eastern Europe, such as Romania.

NuScale has been working with the Romanian government on the Romanian Project that Flour Co. (NYSE: FLR) will be the prime contractor for the Phase 2 front-end engineering design (FEED) project to bring NuScale power modules (NPM) to the rural power project. NuScale is in discussions with other countries as well.

Short Seller Iceberg Research Claims NuScale Is a Bust

While the intent of short sellers is apparently to cause shares to drop in price, their research provides another side to the coin. Short seller Iceberg Research has put out a research report claiming that NuScale will likely run out of cash before completing any projects. It purports that its contract with Standard Power is not viable as the company has no means to support the contract as its CEO has a $54,000 tax warrant in New York. It claims Entra1 is bogus as it was created in 2021 and has a single employee.

Regardless of the allegations, the SMR hype driven by AI data centers seeking clean energy has propped up the stock by over 450% year-to-date (YTD). Research firm Craig Hallum initiated coverage of NuScale with a Buy and a $16 price target on Sept. 26, 2024.

NANO Nuclear Energy: Portable Microreactors, Anyone?

Going smaller than SMRs is NANO Nuclear Energy Inc. (NASDAQ: NNE), which is developing microreactors that are portable. The company is developing a solid-core battery reactor called ZEUS and a low-pressure coolant reactor named ODIN. They are both portable and on-demand capable advanced microreactors that generate a power output of up to 10 megawatts as opposed to 300 megawatts with SMRs.

ZEUS is the size of a garbage truck and can fit in a single shipping container for its reactor core and power conversion system. The portability enables it to be deployed in rural areas without traditional energy infrastructure. ZEUS uses conventional materials and off-the-shelf components that minimize its time to market and costs.

ODIN is a low-pressure coolant advanced nuclear reactor. It operates at a higher temperature than conventional water-cooled reactors, enabling high power conversion efficiency electricity generation.

The applications for microreactors are plentiful, ranging from providing power to off-grid communities to disaster relief, military and defense, remote mining operations and space applications.

The company recently priced an upsized $36 million offering of 2,117,646 common shares and 1,058,823 warrants with an exercise price of $17.00 per share and exercisable immediately. The warrants won’t trade on any market.