Nuclear energy stocks are climbing in 2025, fueled by regulatory changes and rising demand from emerging industries.
Shares of nuclear energy companies have recently surged following the Biden administration’s decision to ease tax-credit rules for hydrogen production.
On January 3, the U.S. Treasury Department and the Internal Revenue Service finalized regulations tied to the Inflation Reduction Act (IRA), broadening the eligibility for tax credits to accelerate renewable energy adoption.
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A regulatory lifeline for nuclear power
A key highlight of the revised rules is the eligibility of nuclear power plants to claim tax credits for clean hydrogen production. This provision applies if the credits are used to prevent the retirement of nuclear reactors.
The final rule is a revision of earlier drafts, which expands access to tax credits of up to $3 per kilogram of clean hydrogen.
These credits now include nuclear plants that might otherwise shut down due to economic challenges, ensuring their continued operation while supporting hydrogen production for decarbonizing industries such as heavy transportation and steelmaking.
John Podesta, senior climate adviser to President Biden, stated that the final rule revisions offer hydrogen producers the clarity needed to advance projects and position the U.S. as a global leader in green hydrogen.
“The extensive revisions we’ve made in this final rule provide the certainty that hydrogen producers need to keep their projects moving forward and make the United States a global leader in truly green hydrogen.” – John Podesta
The finalized rule resolved a contentious debate surrounding the IRA, a landmark 2022 law designed to combat climate change by subsidizing technologies that reduce greenhouse gas emissions.
Broader market reaction
Investors welcomed the latest regulatory update, sparking gains across the nuclear energy sector.
Constellation Energy (NASDAQ: CEG) led the charge, climbing 3.5% to close at $252 on January 3. The stock has since inched higher, currently trading at $253.81.
“We are pleased to see that the U.S. Treasury Department has changed course and that the final rule allows a significant portion of the existing merchant nuclear fleet to earn credits for hydrogen production. “ – Constellation Energy
The company is now evaluating how the final rules and newly proposed electric transmission charges could affect its clean hydrogen project at the LaSalle Clean Energy Center and its broader role in the MachH2 Hub.
Other major players like Vistra Corp (NYSE: VST) surged 7%, while Plug Power (NASDAQ: PLUG) and NextEra Energy Partners (NYSE: NEE) saw increases of 2.6% and 3%, respectively, following the announcement.
Tech giants bet big on nuclear energy
Beyond regulatory shifts, the nuclear sector is gaining momentum from the surging demand for electricity to power artificial intelligence (AI) applications.
AI data centers, projected to use 8% of total U.S. power by 2030, are prompting tech giants like Microsoft (NASDAQ: MSFT) and Meta Platforms Inc. (NASDAQ: META) to invest heavily in nuclear power.
Constellation Energy has already capitalized on this trend. In September, the company secured a two-decade contract to supply nuclear energy to Microsoft’s data centers, a deal that pushed its stock to an all-time high.
Additionally, the General Services Administration (GSA) awarded Constellation $1 billion in combined contracts, including a 10-year, $840 million agreement to supply more than 1 million megawatt-hours (MWh) of electricity annually to over 13 federal agencies across five states and the District of Columbia starting in 2025.
These developments have buoyed the broader nuclear energy sector, lifting stocks across the board.
With regulatory clarity and growing demand for clean hydrogen, nuclear energy stocks are positioned for sustained growth in 2025.
As industries and governments prioritize clean energy, nuclear power companies are emerging as prominent players in the global transition toward a greener future.
Featured image via Shutterstock
