Rolls-Royce (LON:RR) shares closed at a new high on Thursday, fueled by CEO Tufan Erginbilgic's vision to transform the engineering giant into the UK's most valuable company.
Erginbilgic is banking on the firm's small modular reactor (SMR) technology to power the burgeoning artificial intelligence (AI) sector, a move that has captured market attention.
The stock is up an impressive 92% year-to-date, reflecting investor confidence in the company's strategic direction.
Erginbilgic told the BBC in an interview that the core of Rolls-Royce's ambitious plan lies in leveraging its SMR technology to address the energy demands of AI.
The AI boom, while transformative, is energy-intensive, raising both practical and environmental concerns. Rolls-Royce aims to capitalize on this need, offering a clean and reliable energy source.
Deals have already been inked with the UK and Czech governments, signaling early adoption of the SMR technology.
Erginbilgic's leadership has been instrumental in the company's resurgence. Since taking the helm in January 2023, Rolls-Royce's share price has increased tenfold.
His strategic vision and execution have resonated with investors, driving significant value creation. The company's focus on innovative solutions and its ability to secure key partnerships have further bolstered market sentiment.
Despite the allure of potentially higher valuations in the US market, the BBC said Erginbilgic firmly ruled out a New York listing for Rolls-Royce.
This decision comes even as other British firms have sought listings in the US. Shell and AstraZeneca have also reportedly considered similar moves.
The CEO told the BBC, “It's not in our plan. I don't agree with the idea you can only perform in the US. That's not true and hopefully we have demonstrated that.”
Rolls-Royce's decision to remain listed in London, despite a significant portion of its shareholders and customers being based in the US (50%), reflects a strategic bet on the UK's investment climate.
Erginbilgic believes the company can achieve its ambitious growth targets without needing to tap into the US market directly through a listing.
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