Shares of NuScale Power (SMR +6.20%) rose this week, up 15.5% as of 3:02 p.m. ET on Friday. The move comes as the S&P 500 (SNPINDEX: ^GSPC) had gained 0.8% and the Nasdaq-100 gained 2%.
NuScale stock is soaring this week after Alphabet, Amazon, Microsoft, and Meta Platforms reported earnings, revealing the artificial intelligence (AI) megaspend is not slowing down.
NYSE: SMR
Key Data Points
AI infrastructure build is fueling interest in nuclear energy
The staggering scale of energy required for AI data centers has fueled a major run-up for nuclear energy stocks like NuScale this year. The data center buildout is being driven primarily by capital expenditures from just a handful of companies.
Meta, Microsoft, and Amazon all expect to set another record next year, exceeding their capital expenditures from this year. Alphabet hiked its projections once again for the coming quarter. There are no signs -- at least for the time being -- of things slowing down.
That's good news for NuScale, which hopes the small modular reactors (SMRs) it is developing one day power many of these AI data centers.
NuScale has a long way to go
While there is a lot of opportunity here, NuScale has little revenue and significant ongoing costs. It is still developing its technology. And it can take many years to secure regulatory approvals and construct nuclear power plants even once the company perfects its SMR technology -- and there is no guarantee it will.
I think investors have gotten ahead of themselves here.
