With the United States currently experiencing a nuclear industry renaissance, Nano Nuclear Energy (NNE +1.92%) has captured investors' interest.
But for those interested in powering their portfolios with the shares of the advanced nuclear reactor developer, it's important to further acquaint themselves with the business before clicking the buy button.
For all the hype, investors must remember this fact
As artificial intelligence (AI) computing places increasing strains on the electric grid, the allure of advanced nuclear power reactors is growing in popularity. It's no wonder, therefore, that Nano Nuclear Energy is shining bright on growth investors' radars, as the company is making steady progress in its Kronos microreactor.
Image source: Getty Images.
With a power generation capacity of up to 15 megawatts electric (MWe), the Kronos reactor can operate separately from the electric grid and deliver power for a variety of use cases, including data centers, or it can be connected to existing power grids.
The critical thing for potential investors to recognize, though, is that the Nuclear Regulatory Commission has not approved the Kronos design as a prototype, and it's still under development. In this regard, Nano Nuclear Energy is further behind another advanced nuclear power peer, NuScale Power (SMR +1.55%), which has two designs that the Nuclear Regulatory Commission has approved.
NASDAQ: NNE
Key Data Points
The company plans to be more than just microreactors
Nano Nuclear Energy's microreactor development may grab the lion's share of attention, but management is committed to other revenue streams as well. The company strives, for example, to be vertically integrated -- to develop its own nuclear fuel supply chain. But it's not stopping there, as the company also plans on marketing its low-enriched uranium (LEU) and high-assay low-enriched uranium (HALEU) to other small modular reactor companies as well.
The benefits of this endeavor are clearly articulated in the recent 10-Q, where the company states:
"...our goal is to progress toward being what we believe will be the only vertically integrated microreactor business in the country. This would give our business an enormous competitive advantage for both our own reactor development and establishing multiple sources of future revenue to de-risk our company."
Although the company may be trailing NuScale Power in having an approved design for its reactors, the interest in developing a fuel processing business is noteworthy and, should it come to fruition, would in fact provide it with a clear competitive advantage.
There's more to learn about Nano Nuclear Energy
While you may now know some of the salient points about Nano Nuclear Energy stock, this is merely the tip of the iceberg. Potential investors seeking a nuclear stock must conduct thorough due diligence before selecting a stock, performing a SWOT analysis to determine if it is the right fit for them.
