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Hedge funds hit the brakes as nuclear stocks soar: Nuclear power stocks saw major surges in 2024 as interest in the tech grew to meet the AI-driven energy demand, but some hedge funds are worried about risks of an over-valuation, Bloomberg reports. The concerns have pushed some hedge funds like Tribeca Investment Partners and Segra Capital to scale back their exposure and shift sectors.
The dynamics: Tribeca is cutting down its exposure, while Segra is shifting focus on uranium mining companies. Shifting focus to Uranium is expected to bring short-term gains, with predicted supply chain issues expected to drive prices up in 2025. Some analysts are also casting doubt over small modular reactor developers like NuScale, whose commercial viability remains years away, Bloomberg reported.
Some stocks tell the story: Constellation Energy doubled its stock value, while NuScale saw a peak of 800% rise before slowing down. Meanwhile, uranium prices have dropped about a third since their peak in February, leaving investors debating where the real chance lies.
Long-term prospects look healthy: While there are some doubts on the sector, shorting its stocks is likely a bad move “because you’re one data-center announcement” from losing big on the bet, Tribeca’s nuclear portfolio manager Guy Keller told Bloomberg.
