Xos Inc (Xos (XOS)) stock took a beating on Thursday after the electric commercial vehicle maker announced a dilutive capital raise to fund its expansion into AI data centers. Shares were down 25.8% at $5.54 at the time of publication, according to market data.

The broader market was mixed, with the Nasdaq down 0.38% while the S&P 500 gained 0.38%.

Direct Offering Details

On Thursday, Xos entered into a securities purchase agreement with institutional investors for a registered direct offering. The company is selling 1,090,910 shares of its common stock at a purchase price of $5.50 per share. The transaction is priced at-the-market under Nasdaq rules.

Xos expects the offering to result in gross proceeds of approximately $6 million, before deducting offering expenses. Roth Capital Partners is serving as the exclusive placement agent, and the deal is expected to close on or about Friday.

Fueling AI Data Centers and Power Infrastructure

The Los Angeles-based manufacturer outlined specific plans for the cash. According to the announcement, Xos intends to use the net proceeds to fund its growth plans, including the continued expansion of its Power Hub and energy storage business into the grid-independent power markets serving AI data centers, industrial facilities, and other mission-critical power users.

Beyond the data center push, the company plans to allocate remaining funds toward working capital, general corporate purposes, and repayment of debt.

Critical Price Levels to Watch

Despite the sharp sell-off, the chart remains extended. At $5.58, Xos is trading 135.8% above its 20-day SMA of $2.34 and 138.2% above its 200-day SMA of $2.31 — the kind of separation that can be hard to sustain. The RSI sits at 95.47, firmly in overbought territory, suggesting the stock may still have room to fall.