The Senate Finance Committee released recommendations for key elements of the Republican budget bill late Monday that would boost investment in nuclear energy. The news followed Monday stock market action in which Cathie Wood and Ark Invest loaded up on nuclear reactor supplier BWX Technologies (BWXT), a stock that hovered in a buy zone.
Wood's ARK Innovation (ARKK) ETF on Monday purchased 215,830 shares of BWX Technologies for an estimated $30.14 million, according to Wood's ETF daily trade disclosures.
BWX Technologies traded in a buy zone on Monday, advancing 1.2% to 139.67. Aggressive investors would read the stock as extended, up more than 60% from an April low, according to analysis of MarketSurge charts.
The stock edged up 0.3% to 140.15 on Tuesday, just above a traditional 136.31 buy point from a cup base, according to MarketSurge. The company supplies the U.S. Navy with nuclear reactors and also has a strong position in the supply chain for Canada's nuclear energy program. William Blair analysts wrote in late May that BWX could "expand its commercial nuclear power business" into small modular reactor, or SMR, technology.
Wood and Ark Invest also have positions in Canada-based uranium refiner Cameco (CCJ) and SMR startup Oklo (OKLO). Wood's ARK Autonomous Tech (ARKQ) ETF trimmed Cameco and Oklo holdings in late May as nuclear-related stocks soared broadly following President Donald Trump's nuclear executive orders.
The changes sharpen the cuts to Medicaid designed into the House bill, leading to some pushback among House and Senate GOP leaders, according to Politico.
The committee also aimed to eliminate hundreds of billions of dollars in Biden-era Inflation Reduction Act, or IRA, tax credits, but would also increase investment in nuclear energy. The House version of the bill keeps a full phaseout of solar and wind energy tax credits by 2028.
The committee's recommended changes to Trump's signature tax and spending bill would end the $7,500 tax credit for EVs 180 days after becoming law. That's vs. the House's end-of-2025 cutoff. In either case, the loss of credits is likely to hit Tesla (TSLA) and other auto manufacturers.
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While the legislation would strip away tax credits for EVs along with incentives for wind and solar energy, the bill makes modifications to clean energy production tax credits to allow nuclear, hydro and geothermal to continue receiving incentives, in some form, if facility construction starts before 2036.
The House and Senate aim to deliver a reconciled budget proposal to the White House by July 4.
Trump Executive Orders Fuel Nuke Stocks
The inclusion of pronuclear carve-outs in the Senate spending bill comes after Trump in late May signed four executive orders to support the nuclear energy sector and put in place a "total and complete reform" of the Nuclear Regulatory Commission, the NRC. The executive orders also look to speed up the deployment of new nuclear power reactors in the U.S.
The May 23 executive orders directed the government to cut down on regulations and fast-track licenses for reactors and power plants to shrink a multiyear process to 18 months, the Financial Times reported.
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The Trump White House defines artificial intelligence as a national security objective and stipulates that the Department of Energy and Defense work with the private sector to accelerate deployments of SMRs, to power AI.
Big Tech has been bullish on investing in SMRs to power AI data centers. SMRs aim to provide power at the site level, drastically reducing the time and cost of permitting, constructing and operating full-scale nuclear facilities.
Cathie Wood-backed Cameco is placed to be a major beneficiary of these executive orders. Cameco has a partial ownership of Westinghouse.
Westinghouse is reportedly the "top pick" to construct the mandated 10 new large nuclear reactors by 2030.
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