This Nuclear AI Stock is Presenting its First Buy the Dip Opportunity after a 350% Rally, here’s the price
The last three months have been a bullish blur for a few stocks that recently announced their presence in the Artificial Intelligence industry.
In early September a few of the AI leaders started to address a growing need for the future of AI, power. You’ve probably heard a few of the facts, but it all comes down to one statement that I’ve heard repeated over and over…
The average ChatGPT query takes 17 times more energy than the average Google search
AI has exploded since ChatGPT was unveiled to the public two year ago, now the need for power to drive its rapid expansion has turned into one of the largest potential bottlenecks.
A few companies that are preparing to fulfill part of the AI industries needs have rallied an average of 375% since September as investors have been crowding into their stocks.
The parabolic bull run for both stocks has left many investors that want to own them behind in its dust, but the first real “buy the dip” opportunity may have just presented itself this week.
Small Modular Reactors, that’s the thing that’s got Wall Street’s attention this year and it’s the reason that shares of NuScale Power Corporation have been trading more than 400% higher since September.
NuScale Power Corporation (SMR) is a leader in small modular reactor (SMR) technology.
The company was established in 2007 and designs and sells modular light water reactor nuclear power plants aimed at a variety of applications.
Electrical generation, district heating, and desalination and the top uses, but the two letters AI may be ready to take a lead role.
NuScale’s “Power Module” can produce 77 megawatts of electricity, with their larger VOYGR power plant designs offering scalable configurations that can accommodate multiple modules to meet diverse energy needs including AI applications.
NuScale is a of Fluor Enterprises, Inc., a Texas based engineering company that is well known for their work with industrial infrastructure.
NuScale’s ticker symbol is appropriately “SMR”
The market is embracing the idea of nuclear-powered AI, note that I said “the market”
We’re seeing a heavy increase in interest in reviving the nuclear energy industry, but this is a movement that will take years to just get through regulatory review and approval.
Microsoft’s announcement in October to partner with Constellation Energy (CEG) resulted in a 30% rally over the following two weeks. That plan includes restarting one of the facilities at the storied Three Mile Island site.
But the market is clearly favoring the approach of companies partnering with small modular reactor developers as the real future of the industry.
The road will be longer in terms of fully developing products specifically for the AI industry and data centers, along with their approval. But the possibility opens much wider in the market after that point.
Investors that are looking at the “horizon” see SMR technology that can be dropped in data centers as needed, where needed.
After its 350% rally in just 60 trading days (3 months), NuScale shares have dropped 33% from their all-time highs.
That decline has occurred on average volume for the stock, signaling that the move has been an orderly “healthy correction” for shares. A sudden increase or spike on volume would indicate that investors were reacting to bad news or an event that may have changed the company’s outlook.
While a 33% decline for a stock would normally scare most investors off, the technical picture for NuScale suggests that this is the time to consider buying the stock on its recent weakness.
Shares of NuScale are trading just above $20. That price has strong support potential for the stock for two reasons.
First, $20 is a round number. As simple as it is, round numbers often attract buyers because of their simplicity. It’s that simple.
Second, NuScale shares experienced resistance at the same price in late October on its ascent to new highs. Normally, prices that have acted as resistance for a stock turn into support when the stock revisits the same price.
In addition to the round-numbered support at $20, NuScale is also perched just above its bullish 50-day moving average.
This trendline is one of the most widely watched indicators by investors and algorithm traders. This means that a stock is likely to find support as it approaches the trendline. This is especially the case when that 50-day is in a bullish trend, as is the case with NuScale.
With its share price at $21.50, NuScale stock is sitting directly on its 50-day moving average. Investors that have been looking to open, or add to, a position would be wise to consider doing so at this price.
Investors that use a Dollar Cost Averaging strategy (Click here to learn more) should consider the $20 and $17.50 prices as good points to add to their position, bringing their average price per share even lower.
Looking forward, investors should expect that NuScale shares will begin a rally back to their all-time highs at $32.50 and higher.
The incoming Trump Administration has made references to the nuclear industry - specifically the SMR industry – as an efficient way to provide energy solutions for the United States. That position on the industry may begin to work favorably from a regulatory perspective as companies like NuScale begin to scale with AI’s growing need for energy.
NuScale shares maintain a “Bullish” rating with a target price of $50.00.
