X-Energy Stock Closes 27% Above Its IPO Price on Nasdaq Debut

When an initial public offering (IPO) opens above its marketing range, the trading floor generates a specific sound, a low hum that falls somewhere between disbelief and vindication. That boom was heard in the coverage almost instantly on Friday morning as X-Energy’s ticker XE flickered onto the Nasdaq board at $30.11. By the closing bell, the shares were sitting at $29.20, having been priced at $23 the previous evening, already four dollars above the top of the marketed range. a first-day gain of 27%. Suddenly, the small Rockville, Maryland-based nuclear company was valued at about $11.9 billion.

Such numbers spread quickly, but the numbers below are more informative. Over fifteen times, the book was oversubscribed. One-third of institutional orders got nothing at all. Ark Investment Management revealed that it might accept up to $105 million worth of stock at the offer price; this is the kind of information that circulates across desks like rumors. In other words, demand was not a courteous trickle. Dressed in business casual, it was a stampede.

Even if the phrase “nuclear” has its own weight these days, it’s not the only thing attracting the money. It’s the union of artificial intelligence and nuclear power, the increasingly evident issue that no one fully understands how to power the data centers being constructed to operate the next generation of huge models. There is sporadic wind. Solar power is sporadic.

The grid is squeaking. The proposal from X-Energy—small modular reactors that are repeatable, helium-cooled, and sized to sit next to an industrial site—answers a question that wasn’t being addressed so loudly until eighteen months ago. Amazon has business ties with Dow Inc. and Britain’s Centrica, and it is both a client and an equity investor. The first locations revealed are in Richland, Washington, a community that has had reactors since the Manhattan Project, and Seadrift, Texas.

If you can get past the technical verbiage, the technology itself is quite fascinating. The XE-100 may be ganged up to 960 megawatts and can produce 80 megawatts by itself. It is powered by TRISO fuel, which consists of poppy-seed-sized uranium kernels encased in layers of carbon and ceramic that are intended to safely fail at temperatures that conventional fuel is never able to achieve. The CEO, Clay Sell, told reporters that he wants to “make nuclear boring,” which is either a clever marketing ploy or an unintentional admission that the business has failed for decades at being dull.

Nevertheless, it’s difficult to ignore the absence from the festivities. With $94 million in revenue last year, X-Energy recorded a net loss of over $390 million. By its own admission, the business is still a few years away from actually deploying its reactors for commercial use. The underwriters have a 30-day option for an additional 6.6 million shares, and the deal closes on April 27, subject to standard conditions. The difference between a $12 billion valuation and a functional reactor is significant, but none of this is out of the ordinary for a pre-revenue clean energy wager—Tesla raised significantly less in 2010.

Observing this unfold, it seems as though the market has made the decision to re-believe in nuclear before nuclear has made the decision to completely believe in itself. Investors appear to be convinced that there is no alternative logical response to the AI build-out. Perhaps that’s correct. It’s still uncertain if X-Energy will provide it or if they’re just this spring’s most attractive contender. The chart on the first day was spotless. It won’t be in the years to come.