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Today's Featured Article Betting on the Backbone: 3 AI Infrastructure Stocks Written by Jeffrey Neal Johnson. Published 11/25/2025. 
Key Points - NuScale Power holds the only certified small modular reactor design and recently secured a commercial agreement to deploy at a massive scale.
- MP Materials has solidified its position as a strategic asset with government pricing support, ensuring revenue and a balance sheet ready for vertical expansion.
- USA Rare Earth is closing the domestic supply chain loop with a key acquisition and remains on track to commission its magnet manufacturing facility early next year.
Many investors vividly remember the dot-com bubble of the late 1990s. During that era, speculative websites with no revenue collapsed, wiping out billions in market value. However, the companies that built the physical infrastructure of the internet — fiber optic cables, servers, and routers — did not disappear; they became the permanent foundation for the modern digital economy. Today, the artificial intelligence (AI) revolution is approaching a similar turning point. AI valuations are soaring, but they depend on scarce and accelerating physical resources. Unlike the 1990s, when companies built too much fiber capacity and created a glut, the AI era faces a structural shortage of critical inputs. We have plenty of code, but not enough reliable electricity to power data centers and not enough refined materials to build advanced hardware. That structural shortage creates a tangible floor for investors. While software stocks may be volatile, the infrastructure required to power AI represents a concrete asset play. Three companies are well positioned to capitalize on this power-and-materials trade and to act as a hedge against tech sector volatility. The New Bandwidth Is Baseload Power Just as the early internet required massive bandwidth, AI data centers require enormous amounts of electricity. These facilities run 24/7, creating demand for baseload power that intermittent renewable sources like wind and solar cannot provide on their own. That reality has moved advanced nuclear energy from a niche science project to a utility-grade necessity. NuScale Power Corporation (NYSE: SMR) is currently the regulatory leader in this space. It holds the first and only Small Modular Reactor (SMR) design certified by the U.S. Nuclear Regulatory Commission (NRC). This regulatory moat recently translated into significant commercial validation. In September 2025, NuScale's partner signed a landmark agreement with the Tennessee Valley Authority (TVA) to deploy up to 6 gigawatts (GW) of SMR capacity. Despite this progress, NuScale's stock price has pulled back to around $19.85 following a $750 million at-the-market equity offering in November. While dilutive, the offering strengthened the company's balance sheet: - Cash Position: NuScale now holds approximately $753 million in cash and investments with zero debt.
- Revenue Growth: In the Q3 2025 earnings report, revenue rose to $8.24 million, up more than 1,600% year-over-year (YOY), driven by engineering fees.
- Contextualizing the Loss: The company reported a net loss of $532.6 million, but $495 million of that was a one-time, non-cash charge related to the ENTRA1 partnership — not recurring cash burn from operations.
NuScale's selection for the U.S. Army's Janus Program signals that its technology is relevant to national defense, providing government backing that many purely commercial tech stocks lack. Additionally, a new agreement with major shareholder Fluor Corporation (NYSE: FLR) to monetize its stake in an orderly fashion through 2026 removes an overhang of selling pressure that had concerned investors. The Hardware of 2026 Is Rare Earths In the 1990s, the internet relied on physical switches and routers. Today, the physical side of AI — robotics, drones, and advanced data-center cooling systems — depends on high-performance permanent magnets, which are made from rare-earth elements. MP Materials Corp. (NYSE: MP) is the Western Hemisphere's dominant producer of these critical materials. On Nov. 24, 2025, analysts at BMO Capital Markets upgraded the stock to Outperform with a $75 price target, citing the long-term value of a non-Chinese supply chain. MP Materials has successfully shifted its business model. In the third quarter of 2025, the company stopped selling raw concentrate to China to comply with U.S. defense contracts. While that reduced total revenue by about 15%, it was offset by growth in higher-value revenue streams: - Production Records: The company produced a record 721 metric tons of neodymium-praseodymium (NdPr) oxide, a 51% increase YOY.
- New Revenue: MP generated $21.9 million from its new Magnetics segment, demonstrating the payoff from vertical integration.
- Fortress Balance Sheet: MP Materials holds nearly $1.94 billion in liquidity, giving it runway to expand while competitors face constraints.
Importantly, MP Materials benefits from a unique safety net. In October 2025, the Department of Defense announced a Price Protection Agreement (PPA) with the company. This effectively establishes a price floor of $110 per kilogram for NdPr oxide and insures the company's revenue against severe market downturns — an advantage that most tech companies do not have. The Vertical Challenger: USA Rare Earth While MP Materials is the established leader, the market is seeking a fully integrated mine-to-magnet alternative — and USA Rare Earth Inc. (NASDAQ: USAR) is positioning itself to fill that role. The company reached a major milestone in its vertical integration strategy by closing the acquisition of Less Common Metals on Nov. 20, 2025. The deal gives USA Rare Earth immediate metal-making capabilities, effectively linking its Round Top mine in Texas with a magnet manufacturing plant in Oklahoma, which is on track for commissioning in the first quarter of 2026. USA Rare Earth's stock price has faced heavy pressure, falling about 48% over the last 30 days. That decline appears to be largely technical. On Oct. 30, the company issued a notice to redeem all outstanding warrants with a deadline of Dec. 1, 2025. That notice forces warrant holders to either exercise their rights to buy shares (bringing cash into the company) or sell the warrants, which often creates temporary selling pressure. After the Dec. 1 deadline, the artificial selling pressure should ease. Fundamentally, the company has bolstered its balance sheet with a $125 million equity investment and an additional $163 million raised from warrant exercises. With over $400 million in cash and tangible progress toward production, the current share price may represent a discount to the company's intrinsic value. Buying the Foundation, Not the Facade Headlines about an AI bubble focus on lofty valuations, not on physical usage. Even if software valuations retreat, the physical consumption of energy and materials required to run AI models is on a steady upward trajectory. Data centers cannot operate without power, and robots cannot move without magnets. NuScale Power, MP Materials, and USA Rare Earth represent unavoidable toll booths on the road to an AI economy. Whether through the atoms of nuclear fuel or the magnetic pull of rare-earth minerals, these companies supply the essential inputs for the next decade of growth. They combine upside exposure to AI-driven demand with the tangible protection of critical infrastructure and explicit government support. In a market shaken by questions about the durability of digital hype, the safest place may be the foundation.
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