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Vistra, Constellation lead S&P losers as DeepSeek market rout takes down nuclear plays

Seeking Alpha, Jan. 27, 2025, By: Carl Surran, SA News Editor

Nuclear plays tied to the AI revolution are among the biggest losers in Monday’s early trading, as investors weighed the implications of Chinese startup DeepSeek’s launch of a free open-source artificial intelligence model to rival ChatGPT, which appears to use lower-cost chips and less data.

Tech stocks are hammered as the news seemingly challenges the widespread bet in markets that AI will drive demand along a supply chain from chipmakers to data centers, which has powered a huge inflow of capital into the equity markets and racked up record highs.

The DeepSeek model has caused a jolt of uncertainty about the growth of AI’s energy consumption, raising sudden doubts about nuclear power’s role as an answer to data centers’ appetite for power.

As a result, data centers rank among the day’s biggest decliners on the S&P 500, with Vistra (NYSE:VST), Constellation Energy (NASDAQ:CEG) and NRG Energy -23.5%, -18% and -12.4% respectively; Talen Energy (TLN) recently traded -21.6%.

The links to infrastructure companies also are clear: Vertiv Holdings (VRT), which says it offers cooling solutions that “solve the complex challenges arising from the AI revolution,” GE Vernova (GEV) says its gas turbines provide “sustainable solutions for uninterrupted data center operations,” and Quanta Services (PWR), infrastructure services provider for the electric power and pipeline industries – their shares are -24.3%, -17.4% and -16.6% respectively.

Uranium producers and nuclear technology names also trade substantially lower, including Nuscale Power (SMR) -23.8%, ASP Isotopes (ASPI) -23.2%, Oklo (OKLO) -22.7%, Nano Nuclear Energy (NNE) -22%, Lightbridge (LTBR) -11.4%, Centrus Energy (LEU) -11.4%, NexGen Energy (NXE) -10.5%, Uranium Energy (UEC) -10.1%, Cameco (CCJ) -9.6%, Ur-Energy (URG) -9.1%, Denison Mines (DNN) -8.6%, Uranium Royalty (UROY) -7.7%, Energy Fuels (UUUU) -7.1%………………………………………………more https://seekingalpha.com/news/4398929-vistra-constellation-lead-sp-losers-as-deepseek-market-rout-takes-down-nuclear-plays

February 2, 2025 - Posted by Christina Macpherson | business and costs