Good news on the tape. One reason Talen Energy ($TLN) stock price is up so much in the past year is a deal they did with Amazon to provide nuclear energy from its Susquehanna plant to Amazon’s nearby data center. This morning, the companies announced an expansion of that deal with Talen now supplying electricity to other sites throughout Pennsylvania.
Of greater interest to Deep Knowledge Investing subscribers, Talen and Amazon are exploring Talen building small modular reactors (SMRs) to increase grid capacity and to power Amazon AI capabilities. This kind of announcement is exactly the reason we recently increased our uranium position.
The deal runs through 2042 giving Talen ample incentive to increase capacity. The intention is to reach full power volume of 1,920 megawatts of nuclear power by 2032. Like Meta’s similar announcement last week, this shifts electrical generation funding from the government to private payors, something taxpayers should be happy to see.
$TLN stock is up 9% in pre-market trading. DKI premium subscribers will note that I did slightly reduce my $TLN position by 2% last week. The current bid price is 5.7% above where I made that sale meaning I left 11bp of profit on the table. While it would have been better to perfect the timing, initial purchase price for $TLN was $120 and the stock just traded at $275 for a total increase of 129%. In addition, today’s announcement is a huge plus for our uranium position. So, not perfect, but more than good enough.
And a reminder that the original idea came from Enrique Abeyta. Round of applause for him!
IR@DeepKnowledgeInvesting.com with any questions.
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