The Trump Administration Just Gave X-Energy Stock a Boost. Wall Street Sees 137% Upside Ahead.

X-Energy (XE) is back in the spotlight on Wednesday after gaining 7.22% on intraday trading following news that it will participate in a Trump administration-backed initiative aimed at accelerating nuclear reactor deployment for artificial intelligence (AI) data centers. However, the stock gave up that quick gain at the closing bell and closed with a 2.03% drop as investors fully digested the news.

This comes after a difficult few months for the advanced nuclear developer, whose shares remain 50% below their April IPO price despite the recent bounce.

The timing is notable because X-Energy recently delivered another quarter of rapid revenue growth, even as heavy investment spending continued to weigh on earnings. Investors are now weighing whether government support can become the catalyst that changes the stock's long-term trajectory.

The Trump Administration Program Could Be a Meaningful Catalyst

So, Bloomberg reported that X-Energy and Oklo (OKLO) were selected to participate in a $200 million Trump administration program designed to accelerate nuclear reactors capable of supplying electricity to AI data centers.

The initiative also includes major technology companies such as Microsoft (MSFT) and Nvidia (NVDA) and focuses on shortening reactor design, licensing, and construction timelines.

For X-Energy, the program provides more than funding. It offers additional government validation at a time when hyperscale data center operators are increasingly searching for reliable, carbon-free electricity to support rapidly growing AI workloads.

Beyond the new initiative, X-Energy continues advancing its Xe-100 small modular reactor, expanding production of TRISO-X nuclear fuel, and participating in AI-focused nuclear projects alongside leading technology companies.

X-Energy Still Trades at a Premium Valuation

Even after the sharp decline since its IPO, X-Energy remains an expensive stock by traditional valuation standards.

The company trades at roughly 38.40 times trailing sales, well above the broader electrical equipment industry's multiple of around 2.9 times and substantially higher than its peer average near 6.5 times. Some valuation models estimate fair value below the current share price, reflecting the market's expectation that future reactor deployments will eventually justify today's premium.

That leaves little room for execution missteps as investors wait for commercial reactor deployments over the coming years.

X-Energy Is Growing Fast, But Profitability Remains Far Away

X-Energy's first-quarter 2026 results were solid, highlighting both the opportunity and the challenge facing the company.

Revenue more than doubled year-over-year (YOY) to $43.4 million, comfortably ahead of the prior-year period as government-backed Advanced Reactor Demonstration Program (ARDP) work continued to expand. 

However, the worrisome detail is that the company reported a net loss of $166.2 million, compared with a loss of $10.2 million a year earlier, as spending increased on reactor development and fuel manufacturing capacity.

Despite this heavy loss, the company finished the quarter with nearly $944 million in liquidity and no debt following its April IPO, giving management financial flexibility to continue funding commercialization efforts. 

Looking ahead, Wall Street expects approximately $212 million in full-year 2026 revenue, although analysts still forecast another annual loss as X-Energy prioritizes growth over profitability.

Wall Street Still Sees Significant Upside for XE Stock

Even with the valuation apprehensions, analysts still see positive potential in X-Energy's future.

The stock has been rated “Moderate Buy” by many of the analysts who are bulls on the stock, with a mean price target of $37.86, in which case there is a massive upside potential of 138% on the stock.

Further, firms like Morgan Stanley, TD Cowen, UBS, and Guggenheim still have bullish tones, albeit with some firms having reduced their target due to increased development costs.

All told, I think the new Trump administration program emphasizes X-Energy's strategic role in advanced nuclear power. But investing in commercial power deployments that turn government largesse and scaling up AI-related electricity demand into profits is still in construction.