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Written by Jennifer Saibil for The Motley Fool->
X-Energy is developing small nuclear reactors for industrial use and data centers.
It has a deal with Amazon, which has been a major funder, to produce 5 GW of power for the AI giant.
The company is still working on bringing out its products, and in the meantime, it's operating at a loss.
It's always exciting when an initial public offering (IPO) hits the markets, and backing from Amazon (NASDAQ: AMZN) adds a known name to a newcomer.
X-Energy (NASDAQ: XE) develops nuclear energy products, and its small nuclear modular reactors (SMRs) could be an important development for artificial intelligence (AI) and data center expansion.
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Let's see why Amazon has invested in the company and whether or not it makes sense to invest.
X-Energy has been around since 2009, working to create industrial-sized nuclear reactors. It didn't make much noise until recently, as hyperscalers search for low-cost, clean-energy solutions to power data centers. The company's main products today are the Xe-100 gas-cooled SMRs, which use helium to cool the reactors and can produce 80 megawatts (MW) of electricity each, and the TRISO-X fuel, which management says embeds coated particles that can withstand high heat without melting, offering greater stability and safety.
Amazon took an interest in the company in 2024 as the anchor company in a $500 million Series C funding round. The companies are collaborating to produce 5 gigawatts (GW) of energy by 2039. Although X-Energy's technology represents what the future of energy could be, it doesn't actually have any finished products yet. It's aiming to have its first reactors ready by 2030.
X-Energy has made several recent deals, including an 11 GW deal with SGL Carbon and Doosan Enerbility in South Korea, and aside from Amazon, it has orders from Dow Inc. and U.K. company Centrica. According to The Wall Street Journal, Amazon owns 20% of the company.
X-Energy went public on April 24 at $23 per share. And although like many IPO stocks it dropped after a strong rise, it's still up 30% from the IPO.
Having a partner like Amazon is a confidence booster, but this company is far from profitable. It reported $109 million in what it calls revenue and grant income in 2025, with a $390 million comprehensive loss. It isn't slated to produce any product for about five years from now.
X-Energy may make important advances in energy, and down the line, it could be a formidable company. But it's extremely uncertain right now. It also faces competition from companies like Oklo and NuScale as well as conventional nuclear reactor companies.
If you're interested in gaining exposure to this developing technology, you're better off investing in Amazon today, or other clean-energy companies that are already bringing their products to market.
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Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon. The Motley Fool recommends NuScale Power. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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