X-energy’s stock popped today in its debut on the Nasdaq, opening at $30.11 before closing at $29.20, up 27% over its initial public offering of $23 per share.

Investors can’t get enough nuclear power, apparently. Even the initial share price had been revised upward from the $16 to $19 target floated by the company during its investor roadshow. At close, the company was valued at $11.5 billion.

Just five years ago, such interest in a nuclear startup would have come as a surprise to many. 

Back then, the nuclear industry was haunted by delayed projects and massive cost overruns at recently completed reactors. Two power plants were completed in Georgia — one in the late 2010s and another in the early 2020s. In total, they cost around $30 billion to build.

Nuclear startups in the early 2020s were in their infancy, and at least one frontrunner had run into significant regulatory problems, sparking fears that the industry hadn’t been able to put its past behind it.

Now, investors appear optimistic that X-energy and its peers have figured out a way around the challenges.

Much of the momentum can be traced to the AI-driven data center boom. GPUs need tremendous amounts of electricity, and while solar, wind, batteries, and natural gas have been filling the need today, tech companies have been hoping to diversify. Nuclear power is one of the many options they’ve been exploring, hoping that the compact form factor will be an ideal fit for their sprawling data centers.

Nuclear power has long had more potential to power the U.S. grid than it has been able to deliver. Today, about 18% of electricity in the country comes from nuclear power. But reactor costs have risen in recent decades. Nuclear power might be one of the most reliable sources of electricity in the U.S., but it’s also one of the most expensive.

X-energy’s 80-megawatt reactor design is an order of magnitude smaller than many existing nuclear power plants. The company is betting that modularity can help bring costs down, and data center operators are hoping that a single campus can be powered by a fleet of reactors, providing the sort of redundancy and stability they prize. Amazon has said it will buy up to 5 gigawatts worth of capacity from X-energy over the next decade or so, but chemical maker Dow will receive the startup’s first power plant. 

Construction is underway at X-energy’s fuel facility, and while the company has yet to start construction of a power plant, investors appear bullish that the company will be able to break nuclear power free from its decades-long malaise.