Why Nano Nuclear Energy Powered 14.5% Higher in June

Key Points

• Nano Nuclear is developing advanced micro-small modular reactors.

• President Trump's executive orders in May was one factor motivating investors to buy Nano Nuclear stock in June.

• The company isn't likely to generate revenue anytime soon, so conservative investors may be more comfortable with a nuclear energy ETF.

While not the same as the 32.4% gain it logged in May, the rise in Nano Nuclear Energy (NASDAQ: NNE) stock last month was undoubtedly well received among investors. According to data from S&P Global Market Intelligence, Nano Nuclear Energy stock shot 14.5% higher in June.

President Trump's clear support for the nuclear energy industry helped earlier in the month to buoy the company that's developing micro-small modular reactors (SMRs), while momentum toward the passage of the One, Big, Beautiful Bill provided incentive for investors to click the buy button at the end of June.

Image source: Getty Images.

Forget solar and wind: Trump's favorite clean energy is nuclear

Nano Nuclear began June with the wind at its back, thanks to the executive order that Trump signed in late May meant to spur development of the domestic nuclear energy industry. In addition to advancing the development of next-generation nuclear energy assets that can shore up infrastructure that supports artificial intelligence (AI) -- such as data centers -- the executive order seeks to remove a lot of the regulatory hurdles that are challenging SMR companies such as Nano Nuclear.

As June rolled along, it became increasingly clearer that the Democrats would be unable to thwart the passage of the One, Big, Beautiful Bill -- legislation that was well received by the nuclear energy industry. Upon the Senate's approval of the legislation, in fact, Maria Korsnick, president and CEO of the Nuclear Energy Institute, applauded the bill that "allows us to continue down the path to achieve the administration's ambitious goals for deploying new, cutting-edge nuclear technologies that will meet the growing demand for more reliable energy."

Whereas the nuclear power production tax credit was set to expire at the end of 2031, the Senate version of the budget reconciliation bill extends the nuclear power production tax credit through 2032. Plus, the bill extends the tax credits for new nuclear generation through 2033.

With all this political goodwill, should investors power their portfolios with Nano Nuclear now?

Although it seems as if the U.S. is one the verge of entering a nuclear energy renaissance, it's important to acknowledge that Nano Nuclear is still far away from bring one of its SMRs to market. Moreover, it's unlikely that the company will start generating revenue anytime in the foreseeable future.

For the time being, nuclear energy-focused investors would be better advised to consider one of the other leading SMR companies. On the other hand, those who are looking to reduce their exposure to risk would likely be more comfortable with a nuclear energy ETF.

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Scott Levine has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.