The next big AI trade could be nuclear power: Morning Brief

The uptick in investments from major tech companies into nuclear energy, combined with the potential growth of small modular reactors, could signify a positive shift in the sector. However, these developments are contingent upon regulatory approvals and successful technology deployment, which are both uncertain. As such, while the overall sentiment towards nuclear energy is improving, strict timelines and implementation challenges could temper immediate returns.

Utility stocks and those connected to the nuclear energy sector, such as Uranium Energy Corp and Cameco, have benefitted from rising electricity demand, which is expected to persist. Despite the speculative nature of nuclear projects, the industry's reform may present new opportunities. However, investors should consider the volatility and ongoing risks in the market.

Investments in utilities tracking the growing demand for electricity alongside tech expansion could lead to steady long-term gains. The ETF tracking S&P 500 utility companies is showing strong growth. However, market saturation and regulatory factors must be monitored closely for sustainable performance.