BWX Technologies Inc

BWX Technologies supplies nuclear components and services primarily for the U.S. Navy, while also expanding its presence in commercial nuclear power and advanced reactor technologies. Despite underperforming in the recent quarter, we continue to view BWX as well positioned to benefit from growing investment in nuclear energy and defense modernization. The company’s fundamentals remain solid, and we believe it will gain from the increasing focus on these sectors as investor enthusiasm shifts towards long-term growth themes.

We added BWX Technologies, a sole-source provider of nuclear reactors for the U.S. Navy and manufacturer of commercial nuclear components, where steady naval nuclear demand and incremental commercial nuclear opportunities support a durable growth profile.

BWX Technologies shares gained 28% in Q3 2025, driven by second quarter earnings that exceeded consensus expectations by 22%. The significant growth in the company's long-term backlog, which reached $6B—up 70% from the previous year—highlights the increasing demand for nuclear energy solutions. As the need for additional power generation capacity rises, particularly in the context of AI data center buildouts, BWX Technologies is well-positioned to benefit from this trend. The overall outlook remains positive, despite potential stock volatility as investors assess the long-term growth potential.

BWX Technologies was a strong contributor as the company continues to generate solid returns. It is viewed as a potential beneficiary of increased government spending on nuclear power sources. This positions BWX favorably in a market that is increasingly focused on sustainable energy solutions, suggesting a durable growth trajectory. The manager's confidence in BWX is reflected in their decision to add to the position, indicating a belief in its long-term value creation potential amidst market volatility.

When searching for a business that provides stability in an uncertain world, one would be hard pressed to find a better fit than BWX Technologies. BWXT is a sole source provider of the components that allow for nuclear propulsion in the US Navy’s nuclear submarine fleet. These are multi-decade programs and US superiority in nuclear submarine technology is an essential deterrent to Chinese aggression. Government operations account for roughly 80% of BWXT’s revenues and given the sensitive nature of its role in the Navy’s nuclear submarine program, this part of the business is on lockdown. In addition to the stability of its government contracts, BWXT also has several intriguing growth kickers. The US has reached agreement with Australia to sell them nuclear submarines as part of a joint effort to contain China. This provides a tailwind to BWXT’s core nuclear propulsion business. Overall, BWX Technologies is a glove fit for what we look for in the relatively stable portion of our portfolio.

When searching for a business that provides stability in an uncertain world, one would be hard pressed to find a better fit than BWX Technologies. BWXT is a sole source provider of the components that allow for nuclear propulsion in the US Navy’s nuclear submarine fleet. These are multi-decade programs and US superiority in nuclear submarine technology is an essential deterrent to Chinese aggression. Government operations account for roughly 80% of BWXT’s revenues and given the sensitive nature of its role in the Navy’s nuclear submarine program, this part of the business is on lockdown. In addition to the stability of its government contracts, BWXT also has several intriguing growth kickers, including the US agreement with Australia to sell nuclear submarines and the potential for small modular nuclear reactors to power data centers.

BWX Technologies is benefiting from renewed interest in nuclear technologies as an alternative power source. This trend aligns with the broader market narrative around the potential of generative AI and innovation in technology, which is reshaping various sectors. The company is positioned well within this evolving landscape, suggesting strong growth potential as the market continues to recognize the value of nuclear energy solutions.

BWX Technologies, a unique provider of nuclear power solutions, experienced volatility as conflicting headlines suggested potential budget changes to military programs for nuclear submarines and ships that use the company’s solutions. AI enthusiasm also worked its way into expectations as any company with alternative energy capabilities, microreactors in the case of BWX Technologies, was pulled into the narrative to a degree. We believe the company offers stable and growing earnings power and we were happy to increase our position when the share price retreated.

BWX Technologies, a unique provider of nuclear power solutions, experienced volatility as conflicting headlines suggested potential budget changes to military programs for nuclear submarines and ships that use the company’s solutions. AI enthusiasm also worked its way into expectations as any company with alternative energy capabilities, microreactors in the case of BWX Technologies, was pulled into the narrative to a degree. We believe the company offers stable and growing earnings power and we were happy to increase our position when the share price retreated.

BWX Technologies, a unique provider of nuclear power solutions, experienced volatility as conflicting headlines suggested potential budget changes to military programs for nuclear submarines and ships that use the company’s solutions. AI enthusiasm also worked its way into expectations as any company with alternative energy capabilities, microreactors in the case of BWX Technologies, was pulled into the narrative to a degree. We believe the company offers stable and growing earnings power and we were happy to increase our position when the share price retreated.