AI-Exposed Power Stocks Rebound Amidst Market Volatility

Constellation Energy (CEG), Vistra Corp (VST), and GE Vernova (GEV) recoup losses:

After experiencing a sharp decline alongside tech stocks following the release of DeepSeek's AI model, power companies reliant on AI applications saw a significant rebound on Tuesday.

CEG gains 1% after a 21% drop, VST jumps 9% post-28% decline, GEV rises 7%:

Constellation Energy, the leading US nuclear operator, edged up after its previous session's loss. Electricity and power supplier Vistra Corp witnessed a notable recovery, while power equipment provider GE Vernova regained some of its lost ground.

DeepSeek's AI model challenges established players:

DeepSeek's competitive and cost-effective AI model has garnered significant attention, sparking concerns among investors. The model's popularity has raised questions about the sustainability of long-term energy demand from AI applications.

Analysts moderate expectations, but remain optimistic:

While acknowledging the impact of DeepSeek's model, analysts believe data center deployment will continue in the medium term. They question whether energy demand will accelerate or stabilize in the latter half of the decade and beyond.

Wall Street analysts foresee electricity demand surge:

Despite uncertainties, analysts predict an increase in AI-driven electricity usage. US electricity consumption witnessed a 2% jump in 2024, with the Energy Information Administration projecting continued growth.

Data center expansion continues alongside grid development:

Investment in data centers is occurring concurrently with the development of electric grids and infrastructure. Analysts emphasize the marathon-like nature of these projects, which require significant time for implementation.