Yesterday +16%! D-Wave explodes again! Siemens Energy and First Hydrogen shares benefit from AI's energy hunger

Siemens Energy in the US energy boom

The boom in artificial intelligence has triggered a wave of investment – not only in chip manufacturers such as NVIDIA and Broadcom, but also in companies that ensure the energy supply of data centers. This is because every large AI model, every cloud application, and every training of generative systems requires enormous amounts of electricity. According to estimates by the International Energy Agency (IEA), the electricity consumption of global data centers could more than double by 2030. The new GPU clusters, in particular, are driving demand: they consume as much energy as medium-sized cities. Investors are focusing on those who can meet this enormous demand for electricity, cooling, and infrastructure.

New companies are constantly being targeted on the stock market, driving up share prices. These include energy suppliers, fuel cell manufacturers, and specialists in decentralized power generation. Even Plug Power, which was almost written off as a candidate for insolvency, is now one of the big winners. This is because fuel cells, preferably powered by green hydrogen, are expected to enable data centers to operate independently of the overloaded grid.

German companies are also increasingly in the spotlight in this context. Siemens Energy is considered an example of how European technology companies could benefit from this development. With its expertise in gas turbines, power conversion, and hydrogen technologies, Siemens Energy offers solutions that efficiently integrate both conventional and renewable energy sources into industrial applications and data center infrastructures. This is also reflected in the share price. In October 2023, the share was trading below EUR 8. Due to the difficulties in the wind business, the government had to step in with guarantees. Not even parent company Siemens was prepared to do this. But just a few months later, the stock began a spectacular rally. Without any sustained correction, it has been on an upward trend ever since and is now trading at around EUR 100. According to marketscreener.de, 12 out of 23 analysts continue to rate Siemens Energy as a "Buy", while four recommend "Sell". However, almost all analysts have lagged behind the share price performance in recent years. Bernstein takes the cake: its "Sell" recommendation has been in place for over a year, and so far, they have only been able to bring themselves to raise the price target from EUR 15 to EUR 37.

First Hydrogen combines hydrogen and SMRs

A key part of the AI energy boom is technology companies in the fields of small modular reactors (SMRs) and microgrids. SMRs are considered one of the most promising solutions for meeting the enormous energy demands of AI data centers, particularly in North America. These compact nuclear power plants can deliver reliable base load energy as a decentralized and grid-independent supply located close to data centers. Thanks to their modular design, SMRs can be quickly constructed, scaled, and integrated into existing energy infrastructures. For operators of AI sites, this means a stable, clean, and predictable energy supply that meets both sustainability goals and the massive power requirements of next-generation data centers.

First Hydrogen is one of the few publicly traded players active in the SMR space. The Company has its roots in the hydrogen sector and aims to combine both worlds. The concept already has a name: "pink hydrogen." By coupling electrolysers with nuclear power plants, hydrogen can be produced continuously, independently of weather conditions and CO₂-free. This makes the concept not only attractive for data centers, but also for energy-intensive industries such as steel, chemicals, and cement.

Canada aims to play a leading global role in SMR technology and is actively supporting its development. First Hydrogen stands to benefit from this initiative. The Company's SMR activities are bundled within its subsidiary, First Nuclear Corp. In addition, it has a renowned research partner in the University of Alberta. At present, First Hydrogen is not on most investors' radar. However, this could change quickly and catapult the share price from its current level of around EUR 0.30 towards its June high of approximately EUR 0.80. Buying the share and exercising a little patience could pay off.

D-Wave: Will the Trump administration get involved?

Quantum seems to be outpacing artificial intelligence not only in terms of computing speed – the share prices of IONQ, Rigetti, and D-Wave are also exploding in record time on the stock market. D-Wave's stock has gained 350% in recent months. In the past 52 weeks, it has even gained over 2,000%. Its market capitalization is now over USD 10 billion.

This is not deterring the US government from investing in quantum companies. At least, that is what various media outlets are reporting. Based on these reports, D-Wave shares jumped by over 16% yesterday.

According to media reports, the US government is considering equity investments in several quantum computing companies in exchange for subsidies. Even a statement by the US Department of Commerce that no formal negotiations are underway cannot stop the run on the shares at present.

An investment would certainly fit in with the strategy of the US government under Donald Trump. In recent months, a clear goal has been formulated to secure access to critical raw materials and key technologies. This has already been followed by investments in MP Materials, Lithium Americas, and Intel, among others. The move into quantum computing should therefore come as no surprise.

The SMR topic is electrifying investors, particularly in North America. First Hydrogen is expected to benefit from this trend, especially due to its connection with hydrogen technology. Buying the stock and exercising a little patience could pay off. D-Wave, meanwhile, seems unstoppable. The valuation is massive, but the hype may continue. Siemens Energy is probably still one of the more conservative investments in this area. But here, too, the valuation is ambitious.