3 stocks benefiting from rising demand for gas and nuclear power

Gas and nuclear energy are playing an increasing role in meeting the world's energy needs, despite the growing focus on renewable energy sources. The transition to clean energy is continuing, but at a slower pace than originally expected. Nevertheless, it is still clear that reliable and sufficiently available sources such as natural gas and nuclear energy will play a crucial role in the coming decades.

This creates investment opportunities for stocks of companies that benefit from these trends, such as GE Vernova, Baker Hughes and Cameco. Why should you consider investing in these companies?

GE Vernova $GEV: Gas and renewables in one

According to a recent McKinsey report that focuses on the energy transition, the pace of the transition to clean energy is slower than originally expected. Even as renewables grow, fossil fuels will continue to play a significant role in meeting global energy demand through 2050, according to the report. McKinsey estimates that fossil fuels' share of total energy demand is expected to be 52% in 2050, much higher than once predicted.

This fact is favorable for companies like GE Vernova, which was created by a spin-off from the former General Electric. GE Vernova focuses on a combination of gas (mainly gas turbines and related services), renewables (mainly wind power) and power (grid, energy conversion and software solutions). The company saw a 27% increase in orders in the first half of the year, showing that its strategy and prospects in gas and wind power still have great potential for growth.

Baker Hughes $BKR: Clean energy and gas technologies

Another opportunity in the natural gas space is Baker Hughes, an oil and gas exploration, production, industrial and energy technology services company. The company is benefiting from the growing demand for natural gas due to high oil and gas prices, which are encouraging investment in the sector. In addition, the company focuses on new energy, including carbon capture, hydrogen power and clean energy technologies.

Growth in clean energy is particularly evident in new orders. In the first half of 2024, the firm received orders worth $684 million, which is on par with the expected full-year outlook of between $800 million and $1 billion. CEO Lorenzo Simonelli expects natural gas demand to grow by nearly 20% over the next 20 years, which is a big boost to the company's growth.

Cameco $CCJ: Nuclear power on the rise

Nuclear energy currently has one major advantage over renewables - it is not intermittent and its production is stable. In addition, nuclear power plants do not produce CO2 emissions, which is another strong argument for their future growth. In significant news for the nuclear industry, Microsoft recently signed a 20-year power purchase agreement with Constellation Energy to restart the Three Mile Island nuclear power plant. The move demonstrates the growing demand for reliable, long-term power sources for data centers, which are key to cryptocurrencies and artificial intelligence.

This trend is giving a strong boost to companies like Cameco, which focuses on uranium mining and providing fuel services for nuclear power plants. With growing demand for nuclear energy and investment in new nuclear projects, Cameco is expected to continue to benefit from these trends. Expectations that investments in nuclear power will increase could mean significant growth in demand for Cameco's uranium and services.

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Source: Investing.com, TheMotleyFool.