X-energy’s stock surged during its Nasdaq debut, opening at $30.11 and closing at $29.20, which is a 27% increase over the IPO price of $23 per share. The stock had initially been priced higher than the company’s target range of $16 to $19 set during its investor roadshow, eventually valuing the company at $11.5 billion.
Five years ago, such enthusiasm for a nuclear startup was unexpected. The nuclear industry was struggling with delayed projects and massive cost overruns at recently completed reactors, like the two Georgia power plants that cost around $30 billion.
In the early 2020s, nuclear startups were just emerging, and one leader faced significant regulatory problems, stoking fears that the industry’s troubled past was not behind it. However, investors now seem optimistic that X-energy and similar companies have found a way to overcome these challenges.
This optimism is bolstered by the AI-driven data center boom, with GPUs requiring large amounts of electricity. Solar, wind, batteries, and natural gas currently meet these energy needs, but tech companies are looking to diversify sources. Nuclear power, due to its compact form factor, is one option being considered to support sprawling data centers.
Despite nuclear power providing about 18% of U.S. electricity, high reactor costs have limited its potential. Although nuclear power is very reliable, it ranks among the most expensive electricity sources in the U.S. X-energy’s 80-megawatt reactor design is significantly smaller than many other nuclear plants. The company is betting that modularity will help reduce costs, and data center operators hope a single campus can use a reactor fleet for redundancy and stability. Amazon has committed to purchasing up to 5 gigawatts from X-energy over the next decade, with the startup’s first plant to be delivered to chemical maker Dow.
X-energy is constructing its fuel facility, and while it hasn’t begun building a power plant yet, investors remain optimistic that the company can rejuvenate the nuclear power industry.