Finimize - 🔝 Revolut comes out on top, again

What’s going on here?

Higher interest rates did Revolut a favor, so the British fintech showed off a wad of profit on Tuesday.

What does this mean?

UK-based Revolut put cash in the bank last year, with a net profit of $428 million. That’s a nice pick-up from its $7 million profit the year before. Revolut makes the bulk of its money from transaction fees when customers swap currencies and withdraw cash, subscriptions, and crypto trading commissions. The company also has a European banking license, so it can hand out high-interest personal loans in France, Germany, and Spain. And last year, higher interest rates meant customers with loans were paying more on what they’d borrowed. It also helped that more folk than ever have been using Revolut’s services: the company now boasts a hefty 45 million users, up 12 million from last year.

Why should I care?

Zooming in: Just keep on rolling.

Reports have suggested that Revolut’s aiming to sell shares at a price that would value the company at $40 billion, 20% higher than three years ago. That’s more than the valuation of some well-known high street banks in the UK and France. And that’s some feat: plenty of private companies are struggling to raise cash or hike their valuations at all these days. Revolut hinted that it might go public to keep the momentum moving – although, waiting for its UK banking license first would likely pay off, literally.

The bigger picture: There’s hope for your average Joe.

Investing in private companies is generally reserved for the rich and famous, as it tends to require big bucks and you can’t simply cash out when you want. (These investments can make up for it with sweet returns, of course.) But this week, Blackrock announced that it might be able to index private markets. That could lead to an iShares-type product – BlackRock’s current offering for exchange-traded funds – being adapted to let everyday investors in on the private action.

What’s going on here?

Tech companies have been turning to nuclear energy to fulfill the lofty demands of insatiable AI data centers.

What does this mean?

Data centers devour power every time AI systems work on a math question, life crisis, or recipe. But for tech companies to meet zero-emissions targets, those centers need clean fuel. And AI systems are in demand all day and night long now, so the fickle nature of solar or wind power doesn’t fit the bill. That’s why tech companies are using their deep pockets to buy always-on nuclear energy at premium prices. These “behind-the-meter” deals see major tech giants like Amazon buying power directly from plants – a tidy contract for energy companies.

Why should I care?

Zooming in: The US is running on high.

AI accounted for 4% of total energy demand in the US last year, and that’s set to grow to as much as 9% by 2030. That’s partly because data centers can be built much faster with these new nuclear arrangements, as they won’t need as much accompanying infrastructure. So these nuclear energy deals are a win-win: energy firms make a ton of money, and tech companies can run their data centers while meeting emissions targets. Mind you, these deals will divert power from the grid, risking shortages and higher prices for everyday folk who don’t have Big-Tech-sized bank balances.

The bigger picture: It’s all clear for nuclear.

The 2011 Fukushima disaster brought the risks of nuclear technologies to the global stage. So with the world staying clear, uranium – the metal used in nuclear power production – reached a record-low price of under $20 in 2016. But now that nuclear energy has a better reputation and is in higher demand, uranium prices are back to pre-Fukushima levels. That explains why share prices of nuclear energy providers Vistra and Constellation Energy have been on charge this year.