Nuclear Fusion Breakthrough to Supercharge Chevron, Amazon — Here’s How

A 70-year-long effort to harness nuclear fusion reactions to generate unlimited clean energy is finally taking shape. For the first time in history, U.S. government scientists have generated more energy from a controlled reaction than it consumed. While the nuclear fusion industry is still private, there still is a great chance for retail investors looking to cash in on the breakthrough via Chevron (NYSE:CVX) and Amazon (NASDAQ:AMZN).

The breakthrough was achieved at the Lawrence Livermore National Laboratory last Tuesday after successfully simulating the solar reactions.

The net energy gain that the experiment achieved paves the way for an abundant supply of reliable, clean, and sustainable alternatives to fossil fuel. If regularly achieved, net energy gains can curb climate change (if not reverse it in the very long term), oil sector-induced inflation can be tamed, and the world can eventually be weaned off its dependence on fossil fuels.

Looking at this, it is safe to say that the “holy grail” of clean and sustainable energy has come within reach.

Now that we know how nuclear fusion will benefit the environment, let’s shift our attention to the stocks that are very likely to enable the process to benefit investors’ pockets.

Chevron (CVX)

One of the world’s largest energy companies, Chevron, has made several significant investments in the area of clean energy. In this regard, the company started the Chevron Technology Ventures investment fund, which allocates its investments to several low-carbon energy resources. The fund presently has 10 investments in several innovative energy technologies.

The fund’s investment in Zap Energy, a company that is developing nuclear fusion-related technology, can provide Chevron’s investors significant exposure to this area. Moreover, its investment plans in expanding its hydrogen capabilities also speak of its commitment to improving clean energy.

Apart from its investments in clean energy, Chevron’s practical capital spending strategies and cost control measures can fuel solid long-term growth. Strong cash flow generating capability allows the company to up its oil production level, reduce its debt, and enhance shareholder value. Chevron is well-positioned to grow in the conventional oil and energy sector as much as it is when clean energy starts getting commercialized.

Is CVX a Strong Buy, According to Analysts?

Wall Street analysts, on average, think CVX stock can reach $188.08 over the next 12 months, a gain of 10.45%. Coming to what analysts think about the longer term, the consensus is still cautiously optimistic, with a Moderate Buy rating based on five Buys, six Holds, and one Sell.

Amazon (AMZN)

At first glance, Amazon seems to be an unusual choice of stock when it comes to the process of nuclear fusion. However, diving deeper, technology is a very intricately interconnected marvel; and being one of the biggest tech giants, very few technological advancements can escape Amazon’s investments.

Companies dabbling in nuclear fusion directly are looking forward to creating functional reactors in the next few years. Although it’s likely that nuclear fusion technology commercialization won’t happen until the end of the decade, one of the industries that might be among the first to jump on the bandwagon is data centers.

Data centers run on high amounts of power because of the sheer volume of data that forms the backbone of tech. For that reason, data centers are found in less-populated areas and already have the infrastructure to support new generators; thus ticking two important boxes for placing a nuclear reactor (the phrase “data is the new oil” now makes sense).

Now, Amazon already has billions invested in its AWS data centers and is continuing to expand its footprint in this market. In this case, it will not come as a surprise if Amazon, given its remarkable resources, adopts nuclear fusion technology to improve its cost efficiency and revenues.

Is Amazon a Buy or Sell, According to Analysts?

Needless to say, Amazon is a Strong Buy on Wall Street, supported by 33 bullish analysts with a Buy rating and three cautious analysts with a Hold rating. Moreover, in the next 12 months, analysts see the stock price increasing to $140.50, 55.6% higher than current levels.

Takeaway: Chevron and Amazon May Benefit Significantly from Nuclear Fusion 

It has been established that despite the recent breakthrough, nuclear fusion technology still has some time until it is widely commercialized. However, when it happens, Chevron, with its growing investments in clean energy, and Amazon, with its growing footprint in data centers, stand to gain massively from the proliferation of the new technology.

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