High-flying AI stocks tumbled on Friday amid a broad risk-averse pivot on Wall Street.
Utilities Constellation Energy Corp. (CEG) and Vistra (VST) each closed about 8% lower, while nuclear energy technology company Oklo (OKLO) slid 9%. Oklo, which is backed by OpenAI CEO Sam Altman, lost nearly 30% of its value this week.
Nuclear energy stocks have soared in the past year amid booming demand for electricity to fuel power-hungry artificial intelligence models. Vistra and Constellation were two of the S&P 500’s best-performing stocks last year. Even with today’s big losses, they are up more than 200% and 100%, respectively, over the past 12 months.
Major cloud providers such as Microsoft (MSFT), Alphabet (GOOG), and Amazon (AMZN) have invested in nuclear power as a reliable, low-carbon source of energy. Microsoft last year struck a deal with Constellation to restart a dormant reactor at Pennsylvania’s Three Mile Island. And Amazon has invested in projects developing small modular reactors.
The AI craze propelling nuclear stocks higher hit a speed bump late last month when the release of a surprisingly efficient AI model from Chinese start-up DeepSeek raised doubts about the need for American tech companies to spend hundreds of billions on Nvidia (NVDA) chips, Super Micro Computer (SMCI) servers, and the nuclear plants to power them. Many on Wall Street have since shaken off those concerns, but the AI rally has struggled to regain its momentum.
Several other AI “picks and shovels” stocks fell sharply on Friday, including data center operator Vertiv Holdings (VRT), down 8%, and Super Micro Computer, down 5%. Nvidia stock fell 4%.
The sell-off even extended to software companies that have soared on expectations of AI-driven growth. Marketing software maker Applovin (APP), shares of which have risen more than 600% in the last year, dropped nearly 8% Friday. Palantir (PLTR), another AI software winner, was down more than 4%.