Nuclear: It's the Next Quantum Computing
Here's why I'm eyeing this sector including this SPAC; also, how politics are shaping the market outlook.
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The most powerful force in the market this year has been political bias. Many investors have been convinced that Pres. Donald Trump would be an economic and foreign policy disaster and a catalyst for substantial stock market misery. That belief has persisted in the face of positive economic news and chaotic international relations.
The irony is that this negative view of Trump has been consistent fuel for positive market action. The Wall of Worry is Donald Trump, and the market keeps climbing, because so many investors are underinvested or anticipating a major top. These bears justify their political bias by making negative economic forecasts and arguing that the bad news is sure to hit eventually, but it hasn’t happened despite months of doom and gloom.
The action on Monday in response to the Israel-Iran situation has the same feel as what has happened on positive economic news. Bears were anticipating a selloff, and when the market holds up well, there is a rush to reposition, cover shorts, and add long exposure.
Breadth is running more than 3.5 gainers for each loser, and all the major indexes are up more than 1%. The Magnificent Seven MAGS is leading with a gain of 1.5%. It is an extremely broad and bullish action.
I’m trying to get more cash to work, and it is not easy. The best action in my accounts today is AST Spacemobile ASTS, Applied Optoelectronics AAOI, Nvidia NVDA, and PureCyle Technologies PCT.
The Nuclear Option
One group that I’m watching closely is nuclear power, which supports data center operations. One is Oklo OKLOF. Others in the group are Centrus Energy LEU and NuScale Power SMR.
I’m taking a hard look at GSR III Acquisition GSRTX. GSRT is a special purpose acquisition corporation, which is likely preventing some interest due to the bad name that the structure earned. There have been substantial changes in SPAC structures that have eliminated some of the worst abuses.
GSRT has announced a planned merger with Terra Innovatum, which is a developer of a micro-modular nuclear reactor (SOLO) using Low-Enriched Uranium. The merger, valued at a $475 million pre-money equity value for Terra Innovatum plants to take Terra public under the ticker NKLR, with an expected close in the second half of 2025. The deal is expected to generate up to $230 million in gross proceeds (before redemptions), supporting Terra’s goal of commercial deployment by 2028. Terra Innovation is holding an Investors Day on June 25, which may serve as a catalyst for GSRT.
The nuclear sector is similar to what is going on with quantum computers, and I expect both groups to stay in play for a long time.
At the time of publication, DePorre was long GSRT, ASTS, AAOI, NVDA, PCT
