Jane Street is a private trading firm based in New York and one of the largest market makers in the world. The company had over $1 trillion in managed 13F securities as of the end of June. The firm’s second-quarter filings show it opened several new stock positions. Two got our attention.
Jane Street bought about 3.86 million shares of X-Energy Inc. (NASDAQ:XE) worth roughly $70.8 million. It also bought about 1.21 million shares of TotalEnergies SE (NYSE:TTE) worth roughly $94.1 million, giving it exposure to a French oil and gas major.
X-Energy is an advanced nuclear energy company developing small modular reactors, or SMRs. Customers finance and own the projects, while X-Energy makes money from reactor technology, engineering and construction support, licensing and services.
Bull Case
Bulls believe X-Energy is one of the more advanced companies in the emerging SMR industry because it already has major customers and projects moving through the regulatory process.
Its first commercial project is being developed with Dow in Texas, where four Xe-100 reactors are expected to provide both electricity and industrial steam. The US Department of Energy has committed up to about $2.1 billion toward the demonstration program under a cost-sharing arrangement.
Amazon is another major part of the bull case. X-Energy and Amazon are working toward more than 5 gigawatts of new nuclear capacity, with the first Energy Northwest project expected to follow the Dow project. Management has also said it is close to an agreement for another 1-gigawatt project with a major utility.
Bear Case and Risks
X-Energy is still an early-stage company. Its commercial reactors are years away from operation, so investors are paying today for revenue and profits that may not arrive until much later.
Nuclear projects also face significant regulatory and execution risk. Licensing can take longer than expected, construction costs can rise and project schedules can slip by years.
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