By Nate Wolf

Nuclear reactor developer X-Energy's stock has been in a lull since the company's highly successful initial public offering last month, but investors should focus on the long-term potential rather than day-to-day trading, analysts say.

A host of investment banks initiated coverage of X-Energy on Tuesday as the quiet period on firms involved in its IPO lifted. As is often the case with IPO underwriters, most opinions were positive.

The company raised more than $1 billion in its offering in late in April, with the stock pricing at $23 -- well ahead of its $16 to $19 target. Shares surged 56% over the first two days of trading, but have since retreated back to $25.60 as of Monday's close.

The stock was up 3% in early trading Tuesday.

X-Energy reported less than $100 million in revenue last year, which is essentially "pre-revenue," as Guggenheim analyst Joseph Osha puts it. But the company has hitched its wagon to three trends, Osha says: Industrial decarbonization, bipartisan support for nuclear power, and growing U.S. electricity demand from artificial-intelligence data centers.

Guggenheim assigned X-Energy stock a Buy rating and a $57 price target on its long-term potential. It has the backlog to support that kind of lofty valuation, boasting customer contracts with Dow, Centrica, and equity investor Amazon.com.

Morgan Stanley analyst David Arcaro agrees, calling the company a "first mover in next-generation nuclear technology" in a research note Tuesday. The firm gave X-Energy an Overweight rating and a $41 target price.

X-Energy's capital-light model is based on recurring service and fuel sales rather than owning reactors, Arcaro points out. Morgan Stanley sees X-Energy breaking even on an Ebitda (earnings before interest, taxes, depreciation, and amortization) basis in 2030, bringing its first project online in 2033, and reaching 20 gigawatts of power by 2040.

That is roughly the same amount of power the entire New England electrical grid uses on high-demand days in the winter. Getting to that kind of scale over such a long time frame naturally comes with some risk, according to analysts at Jefferies.

The firm initiated coverage of X-Energy stock with a Hold rating and a $28 price target. A lack of available fuel and the rise of faster, cheaper alternatives like solar power, gas, or geothermal energy could derail the stock, Jefferies points out.

Still, X-Energy has a first-mover advantage over its peers. And by getting customer commitments in place, management can feel comfortable that the company will get a return on the reactors it is deploying.

"We see a balanced valuation for the early-stage company," the Jefferies team writes. "Further upside from here will require progress on additional Amazon/ Centrica customer progress, commercialization success, and supply chain visibility."

Write to Nate Wolf at nate.wolf@barrons.com

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May 19, 2026 10:04 ET (14:04 GMT)

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