Defined by the International Atomic Energy Agency as the process where “two light atomic nuclei combine to form a heavier one, releasing massive energy,” nuclear fusion could potentially reshape our energy narrative. Moreover, Bloomberg’s eye-popping projection suggests nuclear fusion could potentially be a $40 trillion market, fueling intrigue in nuclear fusion stocks to buy.
Yet, as intriguing as this progress is, we’re only at the dawn of this energy revolution. Despite impending challenges, the Fusion Industry Association forecasts an operational fusion power plant by 2030. Significantly, nuclear fusion promises not just greater energy output than nuclear fission but does so with a noticeably leaner price tag.
Cenovus Energy (CVE)
Nestled in Calgary, Alberta, Cenovus Energy (NYSE:CVE) stands tall as one of Canada’s hydrocarbon giants. However, what truly sets CVE apart is its forward-thinking approach. While its hydrocarbon prowess remains critical amidst geopolitical energy challenges, the company is astutely venturing into tomorrow’s energy promise.
Moreover, in 2014, Cenovus placed its bets on General Fusion, a Canadian pioneer working diligently on magnetized target fusion (MTF) technology. Its ambitious goal is to usher in zero-carbon fusion energy by the early 2030s. Financially, Cenovus showcases resilience. In the recent quarter, it generated a robust $897 million in free cash flow, slashing its net debt by $265 million, settling at $6.4 billion. Additionally, it repurchased outstanding warrants, trimming the diluted share count by a commendable 2.4%. And with its 0.95 forward price-to-sales ratio that undercuts the sector median by 40%, it’s no surprise TipRanks casts a favorable gaze, signaling a strong buy with a tempting 7% upside.
Renowned for shaping the digital landscape, Alphabet’s (NASDAQ:GOOG, NASDAQ:GOOGL) foray into fusion energy is a riveting twist. This pivot traces back to 2014, as it paired with TAE Technologies, a company with ambitions to achieve commercial-scale fusion energy production by the early 2030s. Fast forward to July 2022, and Alphabet’s fusion-focused investments came back into the spotlight, with TAE’s breakthrough sparking a 5% stock surge.
Moreover, Alphabet’s recent figures have undoubtedly become a beacon for investor enthusiasm. With an impressive $74.6 billion revenue, showcasing a 7.06% year-over-year uptick, it surpassed expectations by a whopping $1.85 billion. Riding on an astounding 55% year-to-date surge and consecutive earnings surprises, its second-quarter earnings per share of $1.44 outshined expectations by 10 cents, exhibiting an incredible fiscal strength.
Furthermore, industry insiders, including Dan Ives from Wedbush Securities, nod to Alphabet’s AI might. Also, as Needham Securities tags Alphabet as a likely AI victor, it’s plausible that its cutting-edge AI technology could be TAE’s ace, potentially revolutionizing fusion in the coming years.
Despite market volatility and challenging price dynamics, Albemarle (NYSE:ALB) stands out with its robust revenue and unwavering cash flows. Interestingly, lithium’s relevance isn’t limited to ubiquitous batteries; it plays a pivotal role in nuclear fusion. The Lithium-6 isotopes are indispensable for the deuterium-tritium fusion process, positioning Albemarle as a compelling nuclear fusion stock.
Moreover, even if the fusion realm takes time to commercialize fully, the electric vehicle surge could potentially strain global lithium reserves by 2025. This projection underscores Albemarle’s importance in the energy matrix. Earlier this month, the company unveiled its second-quarter figures, surprising the street. A leap to $650 million in net income from 2022’s $406.8 million, combined with an impressive 60% bump in revenue, showcases Albemarle’s robust performance.
Furthermore, analysts from TipRanks are already forecasting a whooping 44% uptick. As the lithium market tightens, Albemarle’s cash flow trajectory is poised to climb even higher, making it not just a pivotal player in nuclear fusion but also a wise long-term stock bet.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines