Is Talen Energy (TLN) the Top Pick for Nuclear Energy Investment Among Billionaires?

We recently released a list of the 10 Top Nuclear Energy Stocks That Millionaires Favor Based On Their Investments In this piece, we will examine how Talen Energy Corporation (NASDAQ:TLN) measures up against other top nuclear energy companies.

Currently, nuclear power accounts for nearly 10% of the worldwide electrical output, making it the second largest producer of low-emission electricity globally. It is anticipated that this figure will increase substantially since the International Energy Agency reports that more than 70 gigawatts of additional nuclear capability are being built across the planet. Moreover, over 40 nations plan to enhance nuclear power's contribution within their respective energy frameworks. In the U.S., although accounting for fewer than 8% of operational capacities nationally, nuclear energy supplied approximately 19% of the nation’s electric needs in 2024.

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Nuclear power has become a leading option for fueling the expanding AI industry along with its associated data centers. As per recent projections from Deloitte, the electrical requirements of these data centers might increase five times by 2035, totaling around 176 gigawatts. It is anticipated that about ten percent of this increased requirement will likely be covered through nuclear sources. In fact, just last month, numerous technology leaders gathered during the fringe events of the CERAWeek conference held in Houston and committed themselves to an agreement aimed at boosting global nuclear energy production threefold by mid-century.

Still, the challenge lies in the fact that numerous such initiatives may require several years for development, with certain ones potentially taking a decade or longer before completion. Additionally, they come at significant costs measured in billions of dollars each and frequently encounter difficulties associated with meeting deadlines and budget constraints, thus impacting their financial feasibility and market edge. One potential answer to this predicament comes in the shape of Small Modular Reactors (SMRs), capable of generating up to 300 megawatts per reactor unit and being constructed much faster than traditional models, offering substantial opportunities for reducing expenses. Furthermore, these units can be manufactured in factories using standardized components and are praised for their adaptability, suitable for installation as standalone facilities tailored to specific clients—such as data centers or large-scale industries. According to projections made by the International Energy Agency (IEA), under favorable conditions, SMR deployments might total around 80 gigawatts by the year 2040, representing approximately one-tenth of worldwide nuclear energy production capacities.

Even with an unprecedented rise in demand for nuclear energy, many stocks within the industry have experienced considerable drops during the past year because of the plummeting uranium prices. These prices dropped approximately 37% starting from January 2024. This downturn can partly be attributed to escalating tensions between the U.S. and Canada—the leading provider of uranium to the United States. Additionally, expectations regarding the possible removal of sanctions against Russia—a major supplier of enriched uranium to America’s commercial sector in both 2022 and 2023—are also thought to contribute to the lower uranium costs.

Nevertheless, the nation prohibited the importation of Russian uranium during the previous year to encourage local manufacturing capabilities. Additionally, the Department of Energy received $2.7 billion in funding aimed at fostering the expansion of America’s nuclear fuel supply infrastructure. Consequently, this has led to a significant surge; specifically, uranium production within five U.S.-based facilities located in Wyoming and Texas escalated by 24 percent over the course of 2024. Furthermore, following President Trump’s directive for an investigation into potential tariffs on essential mineral imports such as uranium, financial stakeholders are increasingly investing in shares of domestic uranium enterprises.

A line of utility poles accompanied by power lines illustrates the extent of the electric utility’s operational scope.

Our Methodology

For gathering information for this article, we examined Insider Monkey's database of billionaires and selected the top 10 firms within the nuclear power industry that attracted the largest number of hedge fund investors during Q4 of 2024. In cases where multiple companies shared an equal count of billionaire investors, they were ordered based on their respective market capitalizations at the time this content was written. Here are those rankings: Top Nuclear Energy Stocks as Perceived by Billionaires .

At Insider Monkey, we have an intense focus on the stocks that hedge funds heavily invest in. This interest stems from our findings which indicate that mimicking the leading stock choices made by successful hedge funds allows us to exceed market performance. Each quarter, our quarterly newsletter recommends 14 small-cap and large-cap stocks through this approach, delivering returns totaling 275% since May 2014, surpassing its benchmark by as much as 150 percentage points. see more details here ) .

Talen Energy Corporation (NASDAQ: TLN )

Number of Billionaire Owners: 12

Up next on our list is the Best Nuclear Power Stocks Talen Energy Corporation (NASDAQ: TLN) is a prominent independent power generator and energy infrastructure firm boasting 10.7 gigawatts of generating capacity, which encompasses 2.2 gigawatts from nuclear sources.

In the fourth quarter of 2024, Talen Energy Corporation (NASDAQ:TLN) delivered impressive financials, announcing an earnings per share (EPS) of $0.47, which was notably higher than analyst predictions by $0.67. Additionally, the firm recorded revenues totaling $467 million, surpassing market forecasts by $33.1 million, even though this figure represents a year-over-year decline of 11.39%. TLN boasts a solid financial position, holding around $1.2 billion in liquidity, featuring more than $470 million in cash reserves. Furthermore, for fiscal year 2024, the corporation achieved an adjusted free cash flow of $283 million, successfully outperforming their forecasted midpoint.

Talen Energy Corporation (NASDAQ: TLN) continues to prioritize its shareholders, aiming to distribute 70% of its adjusted free cash flow back to them. In 2024 alone, the corporation bought back $2 billion worth of its own stock, which represents approximately 22% of all its outstanding shares. Additionally, Talen Energy retains authorization for another $1.1 billion under its current share buyback plan until December 31, 2026.

River Road Asset Management indicated the following about Talen Energy Corporation (NASDAQ:TLN) in its Q4 2024 report investor letter :

An additional key player was Talen Energy Corporation (NASDAQ:TLN), which stands out as a prominent independent power generator. This company has an extensive diversified capacity totaling 10.7 gigawatts, composed of various resources including nuclear energy at 48%, natural gas at 41%, and coal at 11%. Their operations cover both the northeastern states through the PJM region and western areas via the WECC network. As electricity grids confront increasing strain due to swiftly growing demands driven by advancements such as AI technology, this trend predicts higher costs for environmentally friendly and dependable sources like nuclear power. Notably, one of TLN’s standout assets is the Susquehanna nuclear plant, benefiting from stable financial protection thanks to tax credits along with significant opportunities for increased revenue when market rates rise following fresh contracts. Such advantageous positions can be seen in TLN's latest deal with Amazon® alongside Constellation Energy Group’s (CEG) initiative to restart the Three Mile Island site aimed at fulfilling Microsoft’s® requirements.

Despite the Federal Energy Regulatory Commission's (FERC) denial of the ISA amendment request for enhanced AWS power capacity, this strategic placement propelled multiple key drivers during the quarter. The firm showcased its dedication to shareholders by implementing another $1 billion share buyback program, raising cumulative repurchases to 20% of outstanding shares in 2024, with $1.0 billion remaining approved until 2026. The stock gained momentum due to considerable interest from passive investment funds, acquiring over six million shares in just September after being included in five different equity indexes. Importantly, core operational metrics stayed solid, fueled by wider profit margins driven by improved spark spreads throughout their generating units, all while sustaining a prudent debt-to-equity ratio at 2.4 times, comfortably under the targeted level of 3.5 times. Market sentiment was notably positive towards the rising trend of escalating energy demands within data centers, predicting growth from 25 gigawatts in 2024 to surpassing 80 gigawatts come 2030, thereby enhancing the perceived worth of Talen’s current production capabilities amid looming supply limitations. As such, we reduced our stake once it neared our valuation estimate.

Overall, TLN ranks 6th On our roster of top nuclear energy stocks favored by billionaire investors, we recognize the growth prospects of TLN. However, we're convinced that AI stocks present even stronger opportunities for substantial gains over a shorter period. Notably, one particular AI stock has seen an increase year-to-date in 2025, contrasting with many others in the sector which have declined by approximately 25%. For those seeking an AI investment alternative to TLN—offering similar potential yet trading below five times its earnings—we recommend reviewing our detailed analysis available in our latest report. cheapest AI stock .

READ NEXT: 20 Top AI Stocks You Should Consider Buying Today and 30 Top Stocks to Purchase Currently as Recommended by Billionaires .

Disclosure: None. This piece was initially published at Insider Monkey .