The Trump administration is backing a major push to build nuclear reactors specifically designed to power artificial intelligence data centers, sending nuclear stocks soaring and signaling a dramatic shift in how the U.S. plans to meet AI's enormous energy demands. NuScale Power Corp. (SMR) jumped over 1% overnight after its best trading session in more than a month, riding optimism from reports that the government is accelerating nuclear power deployment for AI infrastructure.

What's Driving the Nuclear Stock Rally?

The surge stems from two major announcements. First, Bloomberg reported that a Trump administration-led initiative to accelerate nuclear power deployment for AI data centers added advanced reactor developers Oklo Inc. (OKLO) and X-Energy Inc. (XE) alongside major technology companies including Microsoft Corp. (MSFT) and Nvidia Corp. (NVDA). The roughly $200 million program will fund national laboratories and universities to speed the design, licensing, and construction of advanced reactors while reducing operating costs.

Second, Reuters reported separately that the administration plans to submit a proposed 123 Agreement to Congress within days to facilitate U.S.-Saudi cooperation on a multibillion-dollar civil nuclear program. This agreement could include deployment of small modular reactors (SMRs), compact nuclear units designed to be built faster and at lower cost than traditional large reactors.

NuScale Power, currently the only SMR provider with a design certified by the U.S. Nuclear Regulatory Commission (NRC), could be a major beneficiary of a Saudi Arabia deal. The kingdom has steadily advanced its civilian nuclear ambitions over the past decade, initially targeting 17 gigawatts of nuclear capacity by 2032 before extending the timeline to 2040.

Why Are Governments Suddenly Focused on Nuclear for AI?

The connection between nuclear power and AI is straightforward: artificial intelligence systems, particularly large language models (LLMs) that power chatbots and content generation tools, consume staggering amounts of electricity. Data centers running these systems need reliable, continuous power sources, and traditional power grids are struggling to keep pace. Nuclear energy offers a carbon-free alternative that can run 24/7, making it attractive to both governments and tech companies racing to build AI infrastructure.

Saudi Arabia's nuclear strategy reflects this global trend. In 2017, the kingdom launched the Saudi National Atomic Energy Project (SNAEP) under its Vision 2030 strategy, focusing on four key priorities:

• Large Reactor Development: Building traditional large-scale nuclear reactors for baseload power generation
• Small Modular Reactor Deployment: Developing SMRs for industrial applications and desalination, which require less capital upfront and can be deployed in remote locations
• Nuclear Fuel Self-Sufficiency: Achieving greater independence in nuclear fuel production to reduce reliance on imports
• Regulatory Framework: Establishing comprehensive regulations for the nuclear sector to ensure safety and compliance

The U.S. government's $200 million investment signals that policymakers view advanced reactors as essential infrastructure for maintaining technological competitiveness. One retail investor on Stocktwits captured the broader geopolitical concern, noting that China currently has roughly 39 nuclear reactors under construction while the U.S. has zero traditional large-scale commercial reactors underway, and that "advanced SMRs are the only viable path to close the gap".

How to Understand the Market Impact on Nuclear Stocks

For investors and observers tracking this sector, several factors are reshaping the nuclear landscape:

• Stock Performance Context: SMR stock is down more than 46% this year amid a broader selloff in nuclear names as markets rotated into tech-heavy companies, making Tuesday's surge particularly significant as a potential reversal signal
• Sentiment Shift: On Stocktwits, retail sentiment around SMR improved from "bearish" to "neutral" over 24 hours as message volumes jumped from "normal" to "high" levels, indicating increased retail investor interest
• Government Funding Scale: The $200 million program represents a substantial federal commitment to accelerating reactor design, licensing, and construction timelines, which could reduce costs and speed deployment
• International Expansion: A nuclear cooperation agreement with Saudi Arabia could open a multibillion-dollar market for U.S. reactor manufacturers and establish a template for similar deals with other nations seeking AI-era power solutions

The timing of these announcements reflects growing recognition that AI's energy demands cannot be met by renewable energy sources alone. While solar and wind power are expanding, they cannot provide the continuous, reliable baseload power that data centers require. Nuclear energy fills that gap, and the government's willingness to invest in accelerating reactor development suggests that policymakers view this as a critical national priority.

Despite not being explicitly named as part of the administration's initiative, NuScale Power benefited from the broader optimism surrounding nuclear expansion. The company's NRC-certified design gives it a significant competitive advantage, as regulatory approval is often the longest and most expensive phase of reactor development. A Saudi Arabia deal could validate NuScale's technology on the international stage and potentially lead to additional orders from other nations pursuing similar strategies.

The convergence of AI's power demands, government support for nuclear infrastructure, and international interest in SMRs suggests that nuclear energy is entering a new era. Whether this momentum translates into sustained stock gains and actual reactor construction remains to be seen, but the policy signals are unmistakable: nuclear power is no longer a niche energy source but a central pillar of the global AI infrastructure strategy.