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Nuclear Stocks: Are They Really Worth the Risk?

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  Published in Stocks and Investing on Sunday, December 28th 2025 at 10:41 GMT by The Motley Fool

The Nuclear Illusion: Why Investing in Nuclear Stocks Might Be Riskier Than You Think

The resurgence of nuclear power has captured significant investor attention, fueled by concerns about climate change and the need for reliable energy sources. Government incentives, technological advancements (like small modular reactors – SMRs), and a global push for decarbonization have all contributed to a narrative of exciting growth potential in the nuclear sector. However, as The Motley Fool's article "Investors Beware: Nuclear Stocks Are Radioactive" argues, this rosy picture obscures significant risks that could leave investors holding radioactive assets. While acknowledging the long-term importance of nuclear energy, the piece cautions against blindly jumping into nuclear stocks based on hype and promises.

The Allure of Nuclear – And Why It's Complicated

The article correctly highlights why nuclear power is back in vogue. It’s a low-carbon source of electricity, capable of providing baseload power (consistent, reliable generation) unlike intermittent renewables like solar and wind. The Inflation Reduction Act (IRA) in the US, for example, offers substantial tax credits for existing and new nuclear facilities. This, coupled with anxieties about energy security highlighted by geopolitical events, has created a favorable environment for the industry. SMRs are particularly touted as a potential game-changer; these smaller, factory-built reactors promise to be cheaper and faster to deploy than traditional large-scale plants. Companies like NuScale Power (PWR) – mentioned in the Fool article – are at the forefront of SMR development, and their prospects initially seemed incredibly bright.

However, the Fool's analysis reveals a more complex reality. The core issue isn’t necessarily that nuclear power isn't important; it's that investing in nuclear stocks is currently fraught with peril due to a confluence of factors. The article emphasizes that the path from concept and promise to profitable operation for many nuclear companies remains long, expensive, and uncertain.

The Core Risks: Cost Overruns, Delays, and Regulatory Hurdles

One of the biggest obstacles highlighted is the historical track record of cost overruns and delays in nuclear construction projects. These aren’t isolated incidents; they're a systemic problem within the industry. The Vogtle Electric Generating Plant expansion in Georgia, referenced by the Fool, serves as a stark example. This project, years behind schedule and billions of dollars over budget, illustrates the inherent challenges in bringing new nuclear power plants online. The article points out that these cost escalations often erode investor returns significantly.

Regulatory hurdles are another significant barrier. Obtaining licenses and permits is a lengthy and complex process, requiring extensive environmental impact studies and safety reviews. This adds to project timelines and increases costs. Furthermore, the regulatory landscape can shift unexpectedly, impacting project viability. The Fool's article connects this back to NuScale Power, whose initial enthusiasm has been tempered by recent delays in receiving crucial licenses from the Nuclear Regulatory Commission (NRC). While the NRC is working on a streamlined approval process for SMRs, uncertainty remains.

The Financial Strain and Questionable Business Models

Beyond construction challenges, many nuclear companies face significant financial strain. Existing nuclear plants often struggle to compete with cheaper natural gas and renewable energy sources, leading to plant closures and reduced profitability. The article mentions Exelon (EXC), a major utility that has been forced to shut down several of its nuclear facilities due to economic pressures. This highlights the vulnerability of even established players in the industry.

The Fool’s analysis particularly scrutinizes the business models of some companies, especially those involved in SMR development. NuScale Power, despite receiving Department of Energy funding and initial enthusiasm from utilities, is now facing serious questions about its ability to secure contracts and achieve commercial viability. The article points out that NuScale's reliance on a single utility (Utah Associated Municipal Power Systems – UAMPS) for an early deployment is risky, and the withdrawal of several potential customers further underscores the challenges. The company’s stock price has plummeted reflecting these concerns, demonstrating the volatility inherent in this sector.

Beyond SMRs: The Broader Nuclear Landscape

While the article focuses heavily on NuScale due to its prominence, it also touches upon broader issues within the nuclear industry. Uranium mining companies, for instance, are subject to volatile commodity prices and geopolitical risks. The cost of uranium is a significant factor in the economics of nuclear power generation. Furthermore, waste disposal remains an unresolved issue – finding safe and permanent storage solutions for spent nuclear fuel continues to be a political and technical challenge.

The Bottom Line: Proceed with Extreme Caution

The Fool's article doesn’t dismiss nuclear energy entirely; it acknowledges its crucial role in the future energy mix. However, it strongly advises investors to approach nuclear stocks with extreme caution. The industry is riddled with risks – cost overruns, regulatory delays, financial strain, and questionable business models – that make it a highly speculative investment. While government support and technological advancements offer some promise, they don't guarantee success.

The article concludes that while the long-term prospects for nuclear power may be positive, the short to medium-term outlook for many nuclear stocks remains “radioactive” – meaning potentially very damaging to your portfolio if you’re not fully aware of the inherent risks and do thorough due diligence before investing. Investors are urged to consider alternative investments with more predictable returns and less exposure to these significant uncertainties.

This article aims to capture the core arguments presented in the Fool's piece, expanding on them and providing context where necessary. It emphasizes the cautionary tone regarding nuclear stock investment while acknowledging the underlying importance of nuclear energy for a sustainable future.