We recently published a list of the 10 Best Nuclear Energy Stocks to Buy According to Billionaires. In this article, we are going to take a look at where Talen Energy Corporation (NASDAQ:TLN) stands against other best nuclear stocks.
Nuclear power now provides just under 10% of the global electricity supply, becoming the second-largest source of low-emission electricity in the world. This number is expected to grow significantly, as according to the International Energy Agency, over 70 GW of new nuclear capacity is under construction globally, while more than 40 countries around the world have plans to expand nuclear’s role in their energy systems. Nuclear energy also provided over 19% of the United States’ electricity in 2024, despite representing less than 8% of the country’s total operating capacity.
READ ALSO: 11 Best Solar Energy Stocks to Buy According to Hedge Funds
Nuclear power has also emerged as a forerunner for powering the ongoing AI boom and its accompanying data centers. According to the latest estimates by Deloitte, data center electricity demand could rise fivefold by 2035, reaching 176 GW. Approximately 10% of this demand is projected to be met by nuclear energy. Just last month, several tech giants met on the sidelines of the CERAWeek conference in Houston and signed a pledge to support the goal of at least tripling the world’s nuclear energy capacity by 2050.
Yet, the issue is that many of these projects will take years to construct, with some of them even a decade or more away. They also cost billions of dollars and often face challenges related to construction timelines and cost overruns, which can hinder their economic viability and competitiveness. A solution to this has emerged in the form of SMRs, or small modular reactors, that have a power capacity of up to 300 MW per unit and are quicker to build with greater scope for cost reductions. Moreover, they can be factory-built from standard parts and are touted as flexible enough to plunk down for a single customer, like a data center or an industrial complex. The IEA estimates that with the right support, SMR installations could reach 80 GW by 2040, accounting for 10% of the overall nuclear capacity globally.
Despite a record surge in demand, a large number of nuclear energy stocks have witnessed a significant decline over the last year due to the declining price of uranium, which has fallen by around 37% since January 2024. Part of this stems from increasing tensions between the US and Canada, which is the largest supplier of uranium to its southern neighbor. Another reason behind the low uranium price is believed to be the potential lifting of sanctions on Russia, which was the largest supplier of enriched uranium to the US commercial sector in 2022 and 2023.
However, the country banned the import of Russian uranium last year, with the aim of incentivizing domestic manufacturing. The Department of Energy was also awarded $2.7 billion in funding, in an attempt to spur the growth of the US nuclear fuel supply chain. As a result, five US facilities in Wyoming and Texas have spurred a 24% increase in domestic uranium production throughout 2024. Moreover, after President Trump recently ordered a probe into potentially imposing tariffs on critical mineral imports, including uranium, investors are piling in to acquire stakes in domestic uranium companies.
A row of utility poles and power lines, showing the reach of the electric utility operations.
Our Methodology
To collect data for this article, we scanned Insider Monkey’s database of billionaires and picked the top 10 companies operating in the nuclear power sector with the highest number of hedge fund investors in Q4 of 2024. When two or more companies had the same number of billionaires investing in them, we ranked them by their market cap as of the writing of this piece. The following are the Best Nuclear Energy Stocks According to Billionaires.
At Insider Monkey, we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Talen Energy Corporation (NASDAQ:TLN)
Number of Billionaire Holders: 12
Next on our list of the Best Nuclear Power Stocks is Talen Energy Corporation (NASDAQ:TLN), a leading independent power producer and energy infrastructure company with 10.7 GW of generation assets, including 2.2 GW of nuclear power.
Talen Energy Corporation (NASDAQ:TLN) reported a strong performance in Q4 2024, posting an EPS of $0.47, significantly above analysts’ estimates by $0.67. The company’s revenue of $467 million also topped expectations by $33.1 million, despite being down 11.39% YoY. TLN maintains a robust balance sheet, with approximately $1.2 billion of liquidity, including over $470 million in cash. The company also generated an adjusted free cash flow of $283 million in FY 2024, exceeding its guidance midpoint.
Talen Energy Corporation (NASDAQ:TLN) remains committed to its shareholders, with a target to return 70% of its adjusted free cash flow. The company repurchased $2 billion worth of its stock in 2024, equal to 22% of its total outstanding shares. Moreover, it still has $1.1 billion of remaining share repurchase program capacity through year-end 2026.
River Road Asset Management stated the following regarding Talen Energy Corporation (NASDAQ:TLN) in its Q4 2024 investor letter:
“Another top contributor was Talen Energy Corporation (NASDAQ:TLN), a leading independent power producer. TLN boasts a diverse 10.7 GW generation portfolio spanning nuclear (48%), natural gas (41%), and coal (11%) assets across the PJM (northeastern states) and WECC (western regions). The electrical grid faces mounting pressure from rapidly escalating demand, fueled by transformative technologies like artificial intelligence (AI). Consequently, the price of clean and reliable nuclear power is expected to increase significantly. TLN’s crown jewel, the Susquehanna nuclear facility, enjoys dual advantages: a tax credit safeguarding its cash flow downside and upside cash flow potential as power prices respond to new agreements. These benefits are exemplified by TLN’s recent contract with Amazon® and Constellation Energy Group’s (CEG) plans to reactivate Three Mile Island to meet Microsoft’s® demand.
This strategic positioning drove several powerful catalysts in the quarter despite the Federal Energy Regulatory Commission’s (FERC’s) rejection of the ISA amendment for increased Amazon Web Services (AWS) power capacity. The company demonstrated strong shareholder commitment by executing an additional $1B buyback, bringing total repurchases to 20% of shares in 2024, with $1.0B still authorized through 2026. The stock benefited from substantial passive fund demand, with over six million shares acquired in September alone following inclusion in five equity indices. Most importantly, the underlying business fundamentals remained robust, with expanded spark spreads driving increased generation margins across the fleet, while maintaining a conservative leverage ratio of 2.4x, well below the 3.5x target. The market particularly responded to the growing narrative around data center power demand, which is expected to surge from 25 gigawatts in 2024 to more than 80 gigawatts by 2030, positioning Talen’s existing generation capacity as increasingly valuable in a market facing significant supply constraints. We trimmed the position as it approached its assessed value.”
Overall, TLN ranks 6th on our list of the best nuclear energy stocks to buy according to billionaires. While we acknowledge the potential of TLN to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than TLN but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
