AI-related nuclear stocks were hit hard by sellers on Monday following headlines from Chinese AI startup DeepSeek. Early morning headlines rattled investors’ outlook for the Artificial Intelligence industry, including data centers and energy companies.
The headlines suggest that the United States may be in danger of losing its position as the leader in AI as DeepSeek has developed models that operate more efficiently with less capital expense.
Semiconductor companies were among the largest losers as the VanEck Vectors Semiconductor ETF fell more than 10%. That decline was the ETFs worst since the short bear market in March 2020.
Vistra (VST), Nano Nuclear Energy (NNE) and NuScale Energy (SMR) also fell sharply as investors worry that demand for energy may decrease with more efficient AI systems.
This group of AI Nuclear stocks has seen massive gains since September. The rally has been driven by plans from companies like Google, Microsoft and Meta to develop their own data center energy sources.
Last week, shares of Vistra Energy traded as high as $200, an impressive gain of more than 150% since late September.
Today’s selloff has the stock trading 30% lower, below its 50-day moving average. That trendline is widely used as a measure of a stock’s short-term health. While a move below a stock’s 50-day moving average Is often seen as an opportunity to buy the dip, investors may want to wait for another “line in the sand”.
Vistra is now 1% above $135. That price was the site of a long consolidation for the stock during its rally over the last three months. Typically, these prices will continue to act as support, meaning that investors may be waiting to see if $135 holds.
Stepping away from the stock’s volatility, the commoditization of AI products should still be a plus for the Nuclear AI industry.
Cheaper AI will mean that technology and consumers will begin to use even more of this early-stage technology. This means that even more efficient AI models and chips will still demand more energy in the future.
Vistra shares remain in a long-term bull market trend.