Jefferies Initiates Nuclear Sector Coverage, Citing $55 Trillion Capex Outlook Through 2100

Jefferies has initiated research coverage on the nuclear energy sector, forecasting a massive $55 trillion in related capital spending through the year 2100. The investment bank's outlook is predicated on a multi-decade investment cycle driven by soaring power demand from data centers, broad electrification trends, and the need to replace an aging global reactor fleet.

A Multi-Decade Growth Thesis

In a note to clients, Jefferies outlined the key drivers for the renewed focus on nuclear power. The firm highlighted the immense energy requirements of artificial intelligence, including future needs for physical AI applications like autonomous vehicles, robotics, and drones. Analyst Laurence Alexander stated that the $55 trillion capex forecast is "arguably conservative."

The report argues that as governments compete for dominance in AI, they will prioritize access to cheap and reliable electricity, which could lower the investment return threshold for new nuclear projects. This creates a powerful, macro-driven tailwind for the entire nuclear value chain.

Investment Timeline and Market Dynamics

Jefferies' forecast breaks down the capital expenditure into two distinct phases. The first phase involves an estimated $9 trillion of investment by 2050, primarily to address the aging global reactor fleet, which has an average age of 33 years and 43 years in the U.S. A further $46 trillion in spending is projected between 2050 and 2100.

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The firm also noted a near-term supply shortfall for utilities, observing that uranium conversion economics have already reached incentive levels for new production. "WACC is destiny for capital-intensive projects," Alexander wrote, emphasizing the importance of financing costs. Given a recent pullback in sector valuations, the analyst noted a preference for companies with "leverage to spot prices."

Key Stock Recommendations

With the initiation of coverage, Jefferies issued several "Buy" ratings on companies across the industry. The firm's preferred strategy for a long investment cycle is to focus on integrated producers and equipment suppliers with global scale.

• Integrated Miners: Cameco (CCJ) and Kazatomprom (KAP)
• Developers: NexGen (NXE) and Denison Mines (DNN)
• Equipment & Technology: BWX Technologies (BWXT) and Mirion (MIR)

Jefferies specifically favored integrated producers like Cameco, Kazatomprom, and NexGen, along with global capital expenditure plays such as Mirion, for long-term positioning.