Nuclear power stocks continue to soar! X-Energy, backed by Amazon, surged 27% on its IPO debut.
```
The nuclear power concept stock craze continues. Small modular nuclear reactor developer X-Energy soared 27% on its first day listed on Nasdaq on Friday, closing at $29.20 and reaching a market cap of about $11.5 billion. Less than three years ago, the company abandoned plans to go public due to lack of interest, but now, it has made a stunning comeback by riding the wave of AI-driven electricity demand.
X-Energy’s IPO was ultimately priced at $23, exceeding the previously expected range of $16 to $19, raising more than $1 billion—far higher than the originally planned $694 million. Shares opened at $30.11 on Friday, jumping more than 30% above the offering price, and after a slight midday retreat, closed up 27%.
This listing yielded a hefty profit for several well-known early investors. Ken Griffin, founder of hedge fund giant Citadel, invested $100 million about a year and a half ago and, based on the closing price, has made more than $300 million in unrealized gains; asset management firm Ares Management invested over $160 million, expecting returns of more than four times their investment. Amazon is currently X-Energy’s largest shareholder, holding about 24.9%; based on the closing price, Amazon’s holdings have appreciated more than $400 million over the IPO price.
X-Energy’s listing also diverted attention from competitors like Oklo, which fell 7.1% that day, NuScale Power which fell 6%, while Constellation Energy bucked the trend and rose 7.1%.
IPO Oversubscribed, Pricing Far Above Expected Range
X-Energy finalized its pricing late Thursday, selling a total of 44.25 million shares at $23, higher than the top end of the prior $16–$19 expected range. Total shares outstanding stand at about 395.3 million, making the market cap about $9.09 billion at the issue price. After the first day’s close, the market cap expanded further to about $11.5 billion.
CEO J. Clay Sell stated on the day of the listing: "I think investors are impressed by our recognition from marquee customers and our strong, high-quality partners on the balance sheet."
The IPO attracted strong demand from both institutions and retail investors. X-Energy’s opening price of $30.11 highlights that not only institutions, but ordinary retail investors, were eager to participate.
Griffin and Ares: High Returns Sparked by a Speech
Behind this IPO, the investment stories of Ken Griffin and Ares Management are notably dramatic. According to media sources, Griffin delivered a speech in Singapore in 2023, explaining the importance of nuclear power for meeting new data center electricity demand. After hearing about this, David Kaplan, co-founder of Ares Management, had bankers representing X-Energy reach out to Griffin.
Griffin invested $100 million in X-Energy in fall 2024. Based on Friday’s closing price, his unrealized gains exceed $300 million. Ares, led by Kaplan and partner Allyson Satin, saw a more than fourfold return on their investment.
Other investors include Steve Cohen’s Point72, Jane Street, Cathie Wood’s ARK Invest, and the University of Michigan, all of whom are set to benefit from this IPO.
From SPAC Failure to AI Power Favorite
X-Energy was founded in 2009 by aerospace veteran Kamal "Kam" Ghaffarian and is based in Maryland, focusing for years on developing industrial-grade modular nuclear reactors to power factories and industrial facilities. In 2022, it signed an agreement with Dow Chemical to install a nuclear reactor at Dow’s Seadrift plant in Texas, but back then, investors worried the potential market was too limited.
In December 2022, Ares led a $30 million financing round, partnering with two hedge funds to launch a public offering plan via merger with an Ares-sponsored SPAC (blank-check company). However, as enthusiasm for SPACs waned and market caution spread, the merger plan was scrapped in October 2023. Ares continued raising funds to help the company through the downturn.
The explosion in AI computing power demand became X-Energy’s turning point. In 2024, Amazon became both a shareholder and a client, committing to over 5 GW of new nuclear power supply. Hyperscale cloud giants including Amazon, Microsoft, and Meta are demanding more and more electricity to run huge data centers, propelling nuclear power into the spotlight.
Commercial Progress and Competitive Landscape
Unlike most early-stage nuclear energy companies still in the concept phase, X-Energy’s standout advantage is having substantial commercial orders.Its customers include Amazon, Dow Chemical, and UK energy service provider Centrica, all of whom have signed power supply agreements.
J. Clay Sell says the company expects to obtain regulatory approval for its first reactor this year, which will be built at Dow’s Texas plant and is planned to be operational in the early 2030s. Afterwards, X-Energy will build a reactor for Amazon in Washington state.
However, it will take several more years to complete the first reactor and receive full regulatory approval. In 2025, the company is expected to have a net loss of $388.9 million, revenue and grant income of about $109.1 million. Competition comes from TerraPower (backed by Bill Gates), Oklo, and NuScale Power.
First-day Rally May Not Mean Long-term Returns
For individuals considering buying in, market data provides a sobering reference. According to LPL Financial’s Thomas Shipp, who analyzed about 1,500 IPOs over the past 30 years, the median return for buyers at first-day close is negative 4.7%, with 53.9% of samples losing money at an average loss of 39.2%. Compared to the S&P 500, median excess performance is negative 12.5%.
Shipp wrote in his research report: "The conclusion for investors isn’t to avoid IPOs altogether, but to participate with caution and be mentally prepared for significant volatility."
X-Energy’s listing marks a new addition to the nuclear IPO market. While investors enjoy the nuclear power narrative and the AI electricity demand boon, they must confront the reality of long technology deployment cycles, regulatory uncertainty, and high volatility in early-stage stock prices.
Risk Warning and DisclaimerThe market involves risks, and investments should be made cautiously. This article does not constitute personal investment advice, nor does it take into account the special investment goals, financial situation or needs of individual users. Users should consider whether any opinions, viewpoints or conclusions in this article suit their specific circumstances. Investing based on this article is at your own risk. ```