Shares of Uranium Energy (UEC -0.24%) are flying higher on Tuesday. The company's stock spiked 11.8% as of 2:26 p.m. ET. The movement comes as the S&P 500 (^GSPC 0.45%) and the Nasdaq Composite (^IXIC 0.74%) gained 0.4% and 0.6%, respectively.
Uranium Energy and nuclear stocks across the industry saw a boost after a major deal was announced between Meta Platforms and Constellation Energy.
Meta needs a lot of power
The parent company of Facebook and Instagram announced on Tuesday that it has signed a 20-year agreement with Constellation to purchase roughly 1.1 gigawatts of energy from the nuclear company's Clinton Clean Energy Center in Illinois. That is the entire output from the Constellation site's nuclear reactor.
The deal is concrete proof of big tech's newfound interest in nuclear energy. With the advent of generative AI, tech companies are finding current options insufficient to power the massive data centers that power today's exceptionally power-hungry artificial intelligence (AI) models. Nuclear energy offers a reliable and powerful-enough output to meet the demands of AI without emitting greenhouse gases.
Image source: Getty Images.
Here's how Uranium Energy could benefit
Uranium Energy, which provides the uranium that powers reactors like the one Meta will now draw on, saw its stock lifted on the news of Meta's deal. Investors appear to believe more deals like it will be inked in the years to come, and demand for uranium will spike, boosting Uranium Energy's bottom line.
I think Uranium Energy can be a solid addition to a well-diversified portfolio for investors who want exposure to stocks in the uranium space. It is fast growing, and if this trend in big tech's reliance on nuclear power continues, the company is likely to benefit.
