Nuclear energy is in focus as big tech companies like Alphabet (GOOG, GOOGL) and Microsoft (MSFT) turn to nuclear energy to meet the power-intensive needs of their artificial intelligence (AI) data centers. Durgesh Chopra, Evercore ISI managing director, joins Josh Schafer and Madison Mills on Market Domination to take a look at the energy sector.

Chopra says “the single largest catalyst” for independent power producers (IPPs) like Constellation Energy (CEG) and Vista Energy (VIST) is “the need for clean energy, 24/7 energy by these data centers.” The analyst says reopening dormant nuclear plants is “going to be the next big thing” in energy.

He notes,” We have to be careful to balance this demand trend that we bring supply on time while also not disrupting the balance of residential customer builds. So I think that's a key challenge. But this is a good position for utilities to be in.”

For investors looking to get in on the AI-driven energy boom, Chopra says he doesn’t think the utilities sector is currently overbought. “Some of these IPPs may seem expensive on earnings, but there's a tremendous amount of EPS upside… I think there's more to go.” He expects utilities to outperform the market led by the IPPs by the end of the quarter.

Chopra adds that the opportunity in energy stocks is more long-term. “The reality is you build something new today, whether it's a gas plant, whether it's wind, solar storage, small modular reactors, all of these technologies are five to seven years build time… So these things are going to take some time. But they're all additive to earnings and should boost the long-term growth profile of the utility sector.”

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This post was written by Naomi Buchanan.