- Nuclear energy stocks on Monday were hit by investors’ fears related to the new DeepSeek AI tool.
- The Chinese startup is fueling concerns that US AI dominance is slipping.
- Nuclear energy firms had been positioning themselves as suppliers to power-hungry AI data centers.
Fears related to artificial intelligence startup DeepSeek are battering a corner of the energy market that’s been vying to be the power source of choice for the booming AI space in the US.
Nuclear power stocks were caught in Monday’s steep sell-off, tumbling even further than many of the top tech names that plunged on concerns that China’s DeepSeek app could challenge the narrative that helped prop up markets for years.
Nuscale Power Corp, one of the market’s best-performing nuclear energy stocks in 2024, dropped as much as 24%. Vistra Corp, another nuclear power provider, dropped as much as 26%, while Talen Energy Corp and Constellation Energy Corporation dropped 21% and 20% respectively.
Shares of Oklo, a nuclear energy technology company that went public last year, were down about 30% in early afternoon trading.
BWX Technologies, which supplies nuclear energy parts and clean power to the government, dropped as much as 10%. Cameco Corp, another nuclear energy provider, was also lower by 9%.
Nuclear power companies were among the beneficiaries of the AI boom in the last year amid soaring energy demands by data centers and other key infrastructure powering the technology.
But the debut of a cheaper, less energy-intensive AI model is damaging that view, as well as complicating the market’s thinking on lofty stock valuations and heavy AI spending broadly.
“DeepSeek is all anyone is talking about as we kick off this busy trading week,” Jay Woods, chief global strategist at Freedom Capital Markets, wrote in a note on Monday. “The fact that this technology is supposed to take less energy and is more cost-effective than US-based models has US technology investors very concerned.”
The move lower was a sharp reversal for the sector compared to last week, which saw nuclear power stocks rise on fresh promise of an AI boom after President Donald Trump announced a $500 billion infrastructure project dubbed “Stargate.”
The sell-off on Monday also eats into last year’s considerable gains in the space, as investors positioned for nuclear energy stocks to soar alongside tech. Nuscale Power gained 493% in 2024, Vistra Corp soared 262%, and Talen Energy climbed around 212%.