Shifting Focus from NuScale Power: This Lesser-Known Energy Stock Might Provide Superior Investment Opportunities in 2025
The technological revolution in artificial intelligence (AI) is accelerating rapidly, leading to a surge in energy consumption requirements.
As AI applications expand into various sectors like healthcare, finance, transportation, and manufacturing, the need for dependable, eco-friendly energy solutions becomes increasingly pressing. In response, businesses are focusing on scalable, renewable energy resources to support their growing energy needs.
With global energy demand on the rise, some organizations are turning to nuclear power as a solution. One such company gaining attention is NuScale Power (SMR -10.24%), which specializes in small modular reactors (SMRs). There's potential for these SMRs to revolutionize the way nuclear energy is utilized.
While interest in NuScale and similar SMR companies is ongoing, widespread implementation is still years away, according to experts, who predict deployment won't happen until the 2030s. This raises concerns about how to bridge the near-term energy gap.
Enter Bloom Energy (BE -6.72%), another player in the energy sector. Utilizing its fuel cell technology, Bloom is positioning itself as a provider capable of meeting immediate energy needs. The company recently secured a significant agreement, resulting in a staggering 186% increase in its stock price in November. Here's why Bloom might be a better investment than NuScale in 2025.
Bloom's fuel cells can assist tech companies in addressing current energy challenges
Bloom's solid-oxide fuel cell technology offers reliable, low-carbon energy and microgrid solutions for customers. Its Bloom Energy server, a solid-oxide fuel cell power generator, operates using various fuels, including natural gas, biogas, and hydrogen. It provides on-site power production with lower emissions.
The appeal of Bloom's product lies in its ability to address energy needs instantly, not sometime in the future. Its fuel cell technology can be deployed in as little as 50 days and can enhance energy supply from the grid.
Bloom scored a significant victory on November 14, when American Electric Power agreed to purchase up to 1 gigawatt (GW) of solid-state fuel cells for its data centers. American Electric plans to employ these fuel cells for commercial and industrial applications, making the agreement a potential game-changer for Bloom, according to investment analyst Morningstar. American Electric has ordered 100 megawatts (MW) of fuel cells under the agreement and plans to increase its orders in 2025.
Progress in nuclear energy technology will take time to materialize
In contrast, the advancement of nuclear energy technology will take several years. SMR technology is still in its initial stages, and NuScale faces challenges ahead before commercializing its products.
To make its SMRs more economical, NuScale had to upgrade its reactor design from 50 MWe to 77 MWe. However, its larger SMR has yet to receive regulatory approval, with management projecting approval for this model by mid-2025.
Last year, NuScale scored a significant win by partnering with Standard Power to develop two facilities powered by its SMR technology in Ohio and Pennsylvania. NuScale plans to offer 24 units of 77 MWe modules, producing a combined 1,848 MWe of energy from both sites. However, these facilities may not become operational until 2029 at the earliest.
Keep an eye on Bloom Energy in 2025
As AI advances, the demand for energy is escalating rapidly. Companies are racing to meet this expanding need, creating opportunities for innovative, emerging energy providers.
NuScale's technology requires several years to hit the market. Conversely, Bloom Energy's solid-oxide fuel cell is ready to deploy now, and its recent deal with American Power could lead to more opportunities in 2025.
Investing in Bloom Energy and NuScale Power involves risks, as both companies have significantly invested in research and development with minimal revenue generation at this stage. However, Bloom Energy is further along and ready to address growing demand immediately, providing it with more near-term upside than NuScale over the next few years.
In the realm of finance, many companies are seeking sustainable energy solutions to support their growing energy demands due to technological advancements in AI. Given this scenario, Bloom Energy's solid-oxide fuel cell technology, capable of meeting immediate energy needs, has seen a significant boom, resulting in a staggering 186% increase in its stock price in November.
During this period of rapid technological change in AI and energy, Bloom Energy, with its quick deployment time and low-carbon energy solutions, could be an attractive investment option in 2025, providing near-term upside compared to NuScale, which is still in the initial stages of commercializing its small modular reactors.
