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All around the world, nuclear power has been making headlines. On the one hand, we have Germany. It collapsed two nuclear plant cooling towers recently as part of a nationwide decision to phase out nuclear energy production. No more nuclear power for Germany, it would seem.

Japan, however, is taking the opposite stance. Prime Minister Sanae Takaichi told Parliament that:

A stable and affordable energy supply is essential to sustain citizens’ livelihoods and domestic industries, and to strengthen our competitiveness. Domestically produced energy sources, particularly nuclear power and perovskite solar cells, are particularly important for that…

In which case, she’s right on board with U.S. President Donald Trump. Back in May, he signed an executive order to advance the creation of new nuclear reactors, which has led to a lengthening list of related announcements around the country – including the reopening of Pennsylvania’s Three Mile Island, the site of a 1979 partial meltdown.

Nobody actually got hurt by the Three Mile Island event, but it left a bad mark on the industry, nonetheless. And everyone’s been arguing about its merits ever since. As I covered in June, though:

Unlike burning oil or natural gas… nuclear power doesn’t emit greenhouse gases. And unlike solar and wind production, it’s actually reliable; there’s no waiting for the sun to shine or the breeze to blow.

It also requires less land mass to operate than its fellow alternative energy sources. Not to mention how relatively little uranium is needed to create energy.

And this conversation is happening, of course, in the context of surging energy demand from data centers. A report from Lawrence Berkeley National Laboratory says that:

The report finds that data centers consumed about 4.4% of total U.S. electricity in 2023 and are expected to consume approximately 6.7[%] to 12% of total U.S. electricity by 2028. The report indicates that total data center electricity usage climbed from 58 [terawatt-hours, or] TWh in 2014 to 176 TWh in 2023 and estimates an increase between 325 to 580 TWh by 2028.

The world needs more power, and it needs it fast. That’s why I have to side with Trump and Japan. Nuclear energy has enormous potential, and I’m closely watching new investment possibilities as they come up.

That’s why I zeroed in on the big news from Cameco (CCJ) and global alternative asset manager Brookfield Asset Management (BAM).

The Brookfield Angle

In case you didn’t hear, Cameco and Brookfield Asset Management partnered with the U.S. government to build nuclear reactors. At least $80 billion worth, in fact. These new plants will utilize technology from Westinghouse Electric, which is 51% owned by Brookfield Asset Management’s sister company, Brookfield Renewable Partners (BEP), and 49% by Cameco.

The U.S. government, meanwhile, should get 20% of any cash distributions made by Westinghouse over $17.5 billion. And if Westinghouse ever goes public, Uncle Sam will be entitled to 20% of that IPO’s public value (minus $17.5 billion). As a taxpayer, I’m rooting for the government side of this equation to work out, of course. But as an investor, I’m much more interested in the Brookfield connection.

Back in June, I met with billionaire investor Bill Ackman, founder and CEO of Pershing Square Capital Management. We discussed a number of topics, including some of his firm’s holdings.

These include Brookfield Corporation and its 2022 spin-off, Brookfield Asset Management, with its $1 trillion in assets under management across areas like infrastructure, renewable power and transition, private equity, real estate, and credit.

Early in 2024, Pershing Square bought 6.85 million shares of Brookfield, valued at around $288.4 million at the time. And it has gone back for more since then, bringing its total to 41.2 million shares worth around $1.9 billion. This makes it Pershing’s second-largest holding today.

Ackman explained to me that he met Brookfield’s CEO Bruce Flatt back in 2010 while the two firms were working on buying up General Growth Properties, a then-troubled mall operator that has since skyrocketed in value.

It’s easy to see why Ackman was impressed with Flatt. After all, since taking over as CEO in 2002, Brookfield has grown its business into a global force with connections in over 50 countries.

Brookfield is a leader in the most significant and fastest-growing areas of alternative investments, with a proven ability to scale new asset classes. Brookfield invests in essential, durable assets that form the backbone of the global economy.

Flatt also remains deeply involved in Brookfield Asset Management. In fact, Brookfield’s primary asset is its 73% ownership in that spin-off. In which case, it was in very, very good hands even before its $80 billion nuclear partnership was made public recently.

That’s why it was able to work on two very big nuclear deals at the same exact time.

More Nuclear Plays for Brookfield Asset Management

Mere days before the partnership was announced between Brookfield Asset Management, Cameco, and the U.S. government, The Wall Street Journal broke another story. According to reporter Lauren Thomas (my daughter):

Santee Cooper is in advanced talks to sell two inactive nuclear reactors to Brookfield Asset Management that could power data centers underpinning the AI boom.

She added that the two companies “will need to find a construction partner and complete a year or more of due diligence before construction on the inactive plants can restart.” You see, the original project was halted in 2017 after its builder went bankrupt. So, it was never operational and needs to be physically completed before it can turn a profit.

Yet even with that prolonged process, this purchase – which is “expected to be valued in the billions” – is likely to work out very well for Brookfield Asset Management. After all, nuclear power has the full backing of not only President Trump, but also South Carolina Governor Henry McMaster.

According to McMaster, the Palmetto State must prepare for a “future driven by nuclear power generation.” And he already signed an act over the summer to make advanced nuclear facility development and operation a state policy.

Referred to as the South Carolina Energy Security Act, it focuses on improving the state’s energy grid and expanding the Nuclear Advisory Council’s role. So you’d better believe McMaster is on board with a massive, competent business like Brookfield Asset Management getting involved in those goals.

In fact, Santee Cooper President and CEO Jimmy Staton thanked the governor “and the South Carolina General Assembly members who were instrumental in encouraging Santee Cooper” to shop around for a buyer in the first place.

Brookfield Asset Management has been making all the right moves aligning itself with nuclear-friendly leaders. And I personally can’t wait to see what it accomplishes from here for its shareholders. Neither can its analysts, who expect it to grow by 17% in 2026 and 20% in 2027.

The only problem is that Brookfield Asset Management has been trading at around $54.06 with a price to earnings (P/E) ratio of 37.8 times. That’s a tad rich for our taste.

We have been looking to own this asset manager within our core portfolio for months now. But we want to get in at the right price. Brookfield Asset Management remains on our watchlist for now as we wait for a better entry point.

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