Energy IPOs surge as investors hunt for ways to play AI boom

# Energy IPOs surge as investors hunt for ways to play AI boom Source: [https://arstechnica.com/information-technology/2026/07/energy-ipos-surge-as-investors-hunt-for-ways-to-play-ai-boom/](https://arstechnica.com/information-technology/2026/07/energy-ipos-surge-as-investors-hunt-for-ways-to-play-ai-boom/) Investor interest in these IPOs comes amid growing concerns over whether hyperscalers, whose shares have soared in recent years, will be able to convert their huge spending into profits\. Many traders are instead starting to look at smaller companies or those in other sectors that are likely to benefit from this wave of investment\. [](https://cdn.arstechnica.net/wp-content/uploads/2026/07/ftcms_66120abf-95e6-4135-8eb9-378871847068.jpeg) Fervo chief executive Tim Latimer says the company and its investors view public markets as a way to grow quicker\. Fervo raised more than $2bn when it went public in May\. Credit: Michael Nagle/Bloomberg Fervo chief executive Tim Latimer says the company and its investors view public markets as a way to grow quicker\. Fervo raised more than $2bn when it went public in May\.Credit: Michael Nagle/Bloomberg However, despite the surging demand for energy and the strong interest in the IPOs, there are signs that investors are buying into hot stocks at flotation, only to sell out shortly afterwards\. Nearly two\-thirds of the energy companies that floated this year and last are now trading below their offer price, according to Dealogic\. That compares with less than 40 percent of IPOs across all sectors that are underwater\. X\-energy, which develops small modular nuclear reactors and is backed by Amazon, came to market in April and is now trading 33 percent below its $23 offer price\. ERock, a gas generator maker, has lost 42 percent of its value since its IPO in June, while Fermi, a data center energy company, is down 68 percent since coming to market in September\. Deep Fission, which is designing nuclear reactors to be buried in one\-mile underground holes, raised $40 million in June, a 73 percent cut from its initial target\. The company’s shares are down 33 percent from its Wall Street debut\. Brian Kessens, senior portfolio manager at energy\-focused fund firm Tortoise Capital, said some traders are buying into IPOs then selling quickly and “rolling into the next one\.” Investment banks need to make sure they’re setting “reasonable valuations” and be more careful about selling shares to investors who are likely to flip fast, he added\. “If you think that an IPO is going to go really well, then it’s in some sense free money,” said RBC’s Dendrinos\. Some companies, like X\-energy and Deep Fission, are developing technologies that critics say are not yet proven to be technically or commercially viable\. Often those faring better have “a real business now,” said Jeff Osborne, a sustainability and energy transition analyst at TD Cowen, and are “less of a science experiment\.” *Additional reporting by George Steer\. Data visualisation by Nolan Shaffer* *[© 2025 The Financial Times Ltd](https://www.ft.com/)\.[All rights reserved](https://www.ft.com/)\. Not to be redistributed, copied, or modified in any way\.*