Amazon’s AMZN latest venture into nuclear power signals a monumental shift in the landscape. Long perceived as pivotal for carbon reduction efforts, nuclear energy was hindered by cost and safety concerns. Nevertheless, a new era dawns with Small Modular Reactor (SMR) technology taking center stage. As its name suggests, SMRs offer smaller, modular reactors that are not only easier to access and more cost-efficient to construct but also scalable – a symbiotic relationship with today’s tech giants.
Leading tech behemoths like Amazon, Microsoft MSFT, and Google GOOGL are gravitating towards SMR to power their data centers. These centers, housing cutting-edge semiconductors and servers, devour more power than ever before. Recent figures reveal that AI data centers’ power consumption surpasses that of their predecessors by 1.5 times or more, coupled with a rapid proliferation of data centers and technological advancements. Apart from aiding corporate carbon neutrality initiatives, SMRs contribute to the national grid, alleviating the strain on fossil fuel-based energy sources.
NuScale Technology Unveiled: A Game-Changer in the Making
NuScale Technology pioneers the engineering, production, and deployment of the lone U.S.-compliant SMR on the market. With the NuScale Power Module capable of generating 77 megawatts – a fraction of U.S. power demands, its potential magnifies with the VOYGR plant technology, enabling the interconnection of up to 12 reactors in a unified unit. These reactors multipurpose design facilitates energy generation alongside leveraging excess heat for ancillary applications such as desalination and hydrogen production. NuScale’s route to market is steered by a collaborative endeavor with ENTRA1.
While NuScale has yet to yield substantial revenue, 2025 portends a scaling up in sales momentum. A recent partnership with Standard Power is merely a prelude to what lies ahead. Standard Power’s initiative to construct two plants in Pennsylvania and Ohio to energize their data centers marks a pivotal moment. A private equity firm specializing in data centers and colocation services for cryptocurrency miners, AI, and other power-intensive computing operations, Standard Power’s blueprint encompasses two 12-unit VOYGR plants with a combined capacity of 1,848 MWe.
Analytical Support & Challenges
Market analysts are warming up to NuScale for 2024, potentially ushering a favorable market breeze by Q4 and 2025. Encouraging reports from CSLA and Craig Hallum, indicating a Moderate Buy/Buy rating, buoy market outlook. Yet, the consensus target lingers around 50% below recent market valuations, with the recent upsurge elevating the market beyond its prior zenith. Absent fresh revisions, a corrective phase might be imminent to harmonize with analysts’ views.
Although institutional backing is mounting, share ownership remains modest at 15%, paralleled by subdued quarterly activity amid ascending share prices in 2024. Heightened short interest poses a conundrum, likely amplifying market upswings and warranting vigilance. Anticipate market volatility as short interest soared past 25% by September’s conclusion. A potential readjustment of 15% to 30% before bolstering support levels could ensue to counterbalance this scenario.
Technical Analysis: NuScale Climbs to New Heights
The price trajectory of SMR shares exudes vitality. Mounting over 40% post-Amazon’s announcement, the market’s upward momentum, short-covering dynamics, and the SMR ‘bubble’ are propelling its ascent. Surpassing pivotal resistance at $16.75, the market’s trajectory enjoys a robust bullish bias, with corroborative indicators affirming the rally. Given the indicators’ subdued positions, an extended surge might unfurl over several weeks before nearing a climax.
The article “NuScale Rockets Higher on Amazon Deal: How High Can It Go?” originally appeared on MarketBeat.
Market News and Data brought to you by Benzinga APIs