The Rolls-Royce share price had a spectacular performance in 2024, helped by the ongoing recovery of the civil aviation industry. RR stock soared to a record high of 600p, up by almost 1,500% from its lowest point level in 2021. This report explains why the stock has a new catalyst this year.
Small Modular Reactor as a catalyst
The main reason why the Rolls-Royce share price surged in the last few years is that the civil aviation industry rebounded.
It also did well as the defense industry continued booming as global tensions continued rising in Europe and in the Middle East.
The company also surged as the new CEO continued to stamp his authority in the company by boosting efficiency. He has slashed costs and sold some of the least profitable subsidiaries.
Now, the Rolls-Royce share price has a new catayst that may push it higher in the long run. It is one of the most popular players in the fast-growing industry of Small Modular Reactors (SMR).
This is one of the biggest themes in the financial market, with companies like Oklo and NuScale soaring in the past few days.
Rolls-Royce is one of the top players that is building this technology, with the initial deployment being in the UK.
SMRs are small nuclear powered plants that can be used to power communities or manufacturing plants. One of the major appliances for the industry is in the energy-hungry data center industry.
Just last year, Microsoft announced a deal with Constellation, while Google and Amazon have made similar deals. This is a notable deal since SMR investors are firms like Rolls-Royce, BNF Resources, Constellation, and Qatar Investment Authority
According to Rolls-Royce, one SMR plant will be the size of two football pitches and will be able to power over 1 million homes.
If the SMR business succeeds in the UK, there are signs that other countries like Qatar, Saudi Arabia, and some United States. Analysts expect that the SMR industry will continue doing well in the long run. Analysts expect that the market size will grow from $6 billion in 2024 to $7.14 billion in 2030.
Notably, Rolls-Royce share price has been left behind as other startups in the US surge. Oklo stock soared to a high of $27.25, up by over 400% from its lowest point in September. Similarly, the NuScale share price has soared by over 940% from its 2024 low.
Rolls-Royce share price analysis
The daily chart shows that the Rolls Royce stock price has been in a strong uptrend in the past few months. Recently, however, the stock has lost the momentum a bit.
Along the way, the stock has formed a rising wedge chart pattern, a popular bearish sign i the market. The two lines of the wedge are nearing the confluence level, which is when a bearish breakout happens. Also, the Relative Strength Index (RSI) and the MACD indicators have formed a bearish divergence chart pattern. Therefore, the stock will likely have a bearish breakout, with the next point to watch being at 500p.
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