Nuclear-power stocks experienced a significant decline on Monday following the decision by US regulators to reject a deal between Amazon and Talen Energy. The deal, which would have allowed a Talen nuclear plant to supply additional power to an Amazon data center, was turned down by the Federal Energy Regulatory Commission due to concerns about grid reliability and consumer costs.
Talen Energy saw a drop of up to 8.6% on Monday, leading to a broader downturn in the nuclear power sector. Other companies such as Vistra and Constellation Energy also suffered losses, with Vistra sliding 6.7% and Constellation Energy plummeting 13%.
These companies had seen significant gains earlier in the year as the demand for energy from AI data centers surged. Tech companies have increasingly turned to nuclear power to meet this growing energy demand, boosting the performance of nuclear power stocks.
While firms like Constellation Energy had secured deals with tech giants like Microsoft to power their data centers, the FERC's decision against the Amazon-Talen Energy deal could have implications for future nuclear data center agreements. Talen Energy expressed concerns that the decision could negatively impact economic development in states like Pennsylvania, Ohio, and New Jersey.
Overall, the rejection of the Amazon-Talen Energy deal had a ripple effect on other nuclear equities, with companies like Oklo and Nano Nuclear Energy experiencing double-digit declines on Monday. The decision by the FERC has raised questions about the future of nuclear power in meeting the energy needs of AI data centers and the potential impact on the broader nuclear power sector.