Google (GOOGL) is actively considering nuclear power as a potential energy source for its data centers, according to a Bloomberg report. In fact, the tech giant is collaborating with utilities in the U.S. and other countries to assess this option.
GOOGL Is Focusing on Nuclear Energy to Power its Data Centers
This initiative reflects the growing interest from tech companies in atomic energy, driven by the surge in demand for electricity fueled by the artificial intelligence boom. The rising interest in AI has meant that tech companies are increasingly investing in data centers. These data centers, which consist of storage systems and servers, require extensive power to store, manage, and distribute data.
For Google, having a reliable, stable energy supply is crucial for supporting long-term growth, especially as the company expands its artificial intelligence capabilities. In fact, according to the TipRanks “Risk Analysis” tool, 24.1% of GOOGL’s stated risks are technology related; other companies in its sector have lower proportions of technology risks, in comparison.
Regarding this tech risk, the company has stated in its annual filing that any interference with its tech and communication systems could “hurt our ability to effectively provide our products and services, which could harm our reputation, financial condition, and operating results.”
GOOGL Is Exploring Other Countries Besides the U.S. for Nuclear Power
Amanda Peterson Corio, global head of data center energy at Google, told Bloomberg that in highly regulated energy markets in the U.S., where the company cannot purchase power directly, Google has been “working with our utility partners and the generators to come together to figure out how we can bring these new technologies — nuclear may be one of them — to the grid”.
Corio also didn’t deny the possibility of using nuclear energy in countries like Japan. Meanwhile, other tech giants, such as Microsoft (MSFT) and Amazon (AMZN), are already using nuclear power as a stable, low-carbon energy source to meet the skyrocketing demand from their data centers while reducing dependence on fossil fuels.
Is Google a Buy, Hold, or Sell?
Analysts remain bullish about GOOGL stock, with a Strong Buy consensus rating based on 30 Buys and nine Holds. Over the past year, GOOGL stock has increased by more than 15%, and the average GOOGL price target of $201.64 implies an upside potential of 23.7% from current levels.
