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NuScale Power Corporation (SMR) Stock Plunges 25% Amid DeepSeek AI Concerns and Reevaluation of AI-Driven Energy Demand

Yahoo! Finance, Ghazal Ahmed, Thu, January 30, 2025 

We recently published an article titled These 29 AI Electricity, Infrastructure Stocks Are Crashing Due to DeepSeek News. In this article, we are going to take a look at where NuScale Power Corporation (NYSE:SMR) stands against the other AI stocks.

Investors are pulling back from the artificial intelligence trade. Previously, a report by the Lawrence Berkeley National Laboratory highlighted that US data centers are expected to use 6.7% to 12% of all power by 2028. However, one artificial intelligence startup has upended these estimates, leaving investors wondering whether the anticipated surge in power demand and data center expansion still holds.

Energy, infrastructure, and real-estate stocks were tanking on Monday, even though they were known to be less crowded alternatives to stocks such as Nvidia. Monday’s broad-market selloff has revealed how a vast number of energy-related companies have been banking on the AI boom and the anticipated power surge it was expected to bring.

DeepSeek, an artificial intelligence startup from China, caused a frenzy in the AI world after launching its latest AI models. The company claims that these models built are at par or better than industry-leading models in the United States. They require fewer chips and are made at a fraction of the cost. All of these updates are now threatening to upset the technology world. Once the best-performing securities over the past 18 months, US electricity providers are now one of the hardest hit sectors with investors reevaluating their outlooks toward artificial intelligence and the magnitude of money that they are spending………………………………….

DeepSeek AI is also threatening the dominance of current leaders in the artificial intelligence world. This could potentially slow down the deployment of their data centers. However, an energy economist at the University of Houston noted that the wider adoption of AI could be positive news…………………………………………………………

NuScale Power Corporation (NYSE:SMR)

Number of Hedge Fund Holders: 18

Share Price Decline: (25.02%)

NuScale Power Corporation (NYSE:SMR) designs and markets small modular reactors (SMRs). Another stock heavily tied to the AI world, Corvallis-based NuScale has previously benefited from the idea that AI-driven electricity demand increases could boost its small modular reactor business. Now that Wall Street is reevaluating the energy requirements of AI, energy and related utilities stocks have been tanking. In particular, NuScale saw its shares plunge by 25% following the news regarding DeepSeek. Not only do DeepSeek’s AI models use less computing power and chips, but the model released is also open-source. This move has made it harder for competitors to justify the huge costs that they have been spending on hardware, software, and expertise needed to develop similar systems…………….https://finance.yahoo.com/news/nuscale-power-corporation-smr-stock-015431414.html

January 31, 2025 - Posted by Christina Macpherson | business and costs, Small Modular Nuclear Reactors