GE Vernova (GEV) has signed a $15.1 billion deal to build four small modular nuclear reactors in Canada.
The deal has been inked with Ontario Power Generation, with the first reactor to be located at the power company’s Darlington Nuclear Project site in Clarington, Ontario near Toronto, Canada’s biggest city. The first nuclear reactor is expected to cost $4.38 billion, with future costs for the additional three reactors expected to decline as GE Vernova gains expertise in building them.
With the GE Vernova agreement, Canada becomes the first Group of Seven (G7) nation to move forward with the development of small modular nuclear reactors. The small modular reactors, or SMRs as they are known, are expected to be produced in factories and then assembled onsite, a strategy that is expected to keep costs and production time down.
Rising Demand
While still a nascent industry, interest in nuclear power is rising around the world as technology companies and governments look to clean power to meet future electricity demand. Technology companies such as Microsoft (MSFT), Amazon (AMZN), and Meta Platforms (META) are considering small modular nuclear reactors to help power their artificial intelligence (AI) data centers.
The Canadian province of Ontario says it is moving forward with the nuclear reactors because, by 2050, its power needs are forecast to rise by 75%. GEV stock has risen 136% over the past year as surging demand for power, driven by data centers and new factories, has driven its financial results.
Is GEV Stock a Buy?
The stock of GE Vernova has a consensus Strong Buy rating among 16 Wall Street analysts. That rating is based on 15 Buy and one Hold recommendations issued in the past three months. The average GEV price target of $430.64 implies 6.76% upside from current levels.
