After the DeepSeek Selloff, Energy and Nuclear Securities Recover.

After the DeepSeek Selloff, Energy and Nuclear Stocks Recover | OilPrice .com

Alex Kimani

Alex Kimani

Alex Kimani is a former finance writer, investment, engineer and scientist for Safehaven.com. &nbsp,

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By Alex Kimani- Feb 03, 2025, 2: 00 AM CST

Nuclear powerplant

Last Monday, China’s AI laboratory DeepSeek rattled Silicon Valley after its massive language model outperformed American AI leaders, defying American attempts to stop China’s high-tech interests. The U.S. stock markets were bullied. According to benchmarks posted on, R1 outperformed models from OpenAI, Meta ( NASDAQ: META ) and Anthropic, who have spent billions of dollars building their models. In a complex report, DeepSeek claimed that its V3 model had a coaching cost under$ 5.6 million, which is a significant savings over the hundreds of millions or even billions of dollars that the U.S. AI laboratory charges for its big speech models. The fact that the Chinese AI lab was able to accomplish this despite having to navigate U. S. semiconductor restrictions on China–which bans export of powerful AI chips such as Nvidia Corp‘s&nbsp, ( NASDAQ: NVDA ) H100s–makes it all the more impressive.

Among the day’s biggest losers was Nvidia itself, with$ 589B in market cap wiped off on Monday, marking the biggest one-day loss in U. S. stock history. Broadcom ( NASDAQ: AVGO ) crashed 19 % while mobile chipmaker Qualcomm ( NASDAQ: QCOM) fell 16 %. In the energy sector, nuclear and electric utility Constellation Energy Corp. ( NASDAQ: CEG ) tanked 20 % with many nuclear stocks declining by double digits. Investors are now questioning Wall Street’s recent push to support the “warm AI-driven electricity demand” hypothesis because DeepSeek matches power-hungrier AI models ‘ performance. Earlier, Sreedhar Sistu, vice president of artificial intelligence for Schneider Electric ( OTCPK: SBGSF), predicted that AI power demand will grow almost five-fold by 2028. &nbsp,

Meanwhile, LandBridge Co. ( NYSE: LB ) led the selloff, diving 17 % after more than tripling since its June IPO. The Permian Basin company plans to start a business on land that will support gas-fired power plants in the United States. It owns about 272,000 acres. &nbsp,

Nuclear Stocks Retain

Thankfully, the recent upturn in the nuclear sector has resulted in a number of stocks recovering from the DeepSeek panic. Last week, President Donald Trump a$ 500 billion joint venture with Oracle Corp. ( NYSE: ORCL), OpenAI, and SoftBank ( OTCPK: SFTBY ) to build AI infrastructure in the U. S. The companies have pledged to commit$ 100 billion to start, and as much as$ 500 billion over the next four years toward the initiative, with Trump calling it “largest AI infrastructure project in history”. OpenAI, maker, said it expects the project, called Stargate, to help support American leadership in AI, and that it could create “hundreds of thousands” of jobs in the U. S. Other tech giants including Nvidia Corp, Microsoft ( NASDAQ: MSFT) ) and Arm Holdings ( NASDAQ: ARM ) are also expected to be technology partners in the project.


Shares of developer of small, modular nuclear reactors ( SMRs ) NuScale Power ( NYSE: SMR ) are up 45.7 % in the year-to-date, Oklo Inc. ( NYSE: OKLO ), which is backed by OpenAI CEO Sam Altman, has surged 105.6 %, Vistra Corp. ( NYSE: VST ) has advanced 26.6 % while Centrus Energy ( NYSE: LEU) has jumped 28.5 % while Constellation Energy is up 34.2 % over the timeframe. LandBridge is still up 4.6 % YTD.

Meanwhile, shares of Nano Nuclear Energy ( NASDAQ: NNE ) have returned more than 1, 000 % since its May 2024 IPO. After the company was granted patents related to its designs for a modular transportable nuclear generator, the shares increased even more. &nbsp, Nano Nuclear is developing ZEUS, a solid core battery reactor, and ODIN, a low-pressure salt coolant reactor.

Long-Term Bullish

Despite the release of less expensive and more powerful DeepSeek AI models, Wall Street continues to support nuclear energy. ” Demand is definitely going to rise, but by how much, we don’t know”, said Bloomberg Intelligence utilities analyst Nikki Hsu. Nobody is certain what AI demand will be.

Indeed, DeepSeek’s efficiency could even lead to more widespread use of AI. Data centers may end up simply processing more data, according to Carlos Torres Diaz, head of power markets research for Rystad Energy, if they become more effective.

The big nuclear rally started last year with Standard Power signing an agreement to supply the data center provider with SMRs. Standard Power–a developer of modular data centers–will use NuScale Power’s power solutions at two separate sites, where up to 12 SMRs ( at each site ) would be used to provide power for new data centers. SMRs were suddenly recognized by the market as a viable option for data centers struggling to keep up with the rising power demands from artificial intelligence ( AI ) computing. &nbsp,

The nuclear industry’s long-term outlook is still positive, with nuclear power expected to be able to meet rising AI demand and reduce greenhouse gas emissions. The International Energy Agency that global data center electricity consumption will jump from 460 terawatt-hours in 2022 to 1, 000 terawatt-hours in 2026. According to Goldman Sachs, rising electricity demands from running AI data centers will result in downstream investment opportunities for utilities, renewable energy generation, and industrial sectors. The investment bank forecasts that from 2023 to 2030, data center power demand will increase at a compound annual growth rate of 15 %, with data centers accounting for 8 % of the country’s total electricity output at the end of the forecast period, compared to 3 % currently. According to analysts, 47 GW of additional power generation capacity will be required to meet the growing demand for data centers in the United States by 2030.

Last year, a total of 34&nbsp, countries, including the U. S., to increasingly deploy nuclear power to reduce reliance on fossil fuels. According to the International Energy Agency’s ( IEA ) report , nuclear power generation is forecast to reach an all-time high globally in 2025, exceeding the previous record set in 2021 as new reactors begin commercial operations in multiple markets, including China, India, South Korea, and Europe, output from France climbs and several plants in Japan are restarted. &nbsp,

By Alex Kimani for Oilprice .com

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