Why Did NuScale Stock Soar This Week?
Key Points
Artificial intelligence (AI) data center spending is still white-hot, giving investors faith there will be plenty of demand for NuScale's reactors.
The latest round of earnings from big tech revealed AI capital expenditures are still growing.
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Shares of NuScale Power (NYSE: SMR) 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.
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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.
Image source: Getty Images.
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.
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Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, and Microsoft. The Motley Fool recommends NuScale Power and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
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