NuScale Power Is Interesting, but Here’s What I’d Buy Instead

NuScale could be an attractive energy source as tech giants monitor nuclear energy developments.

However, NuScale is years away from commercialization, which makes it a very risky stock.

Axcelis Technologies is a contrarian pick due to its ion implantation technology. The company is shifting its focus from the EV industry to AI infrastructure.

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NuScale Power (NYSE: SMR) may fulfill the next wave of artificial intelligence (AI) energy demands with its small modular reactors. The company aims to deliver reliable, carbon-free nuclear power that doesn’t put stress on the power grid.

The company won’t be commercialized for a few years, but it has made progress with its designs. The U.S. Nuclear Regulatory Commission approved NuScale’s power design for a 462-megawatt small modular reactor power plant last year, which is a big benchmark for the company.

However, the entire thesis depends on NuScale Power quickly scaling revenue once it is commercialized. Meanwhile, the stock trades at a market capitalization of $5.6 billion, which is after it lost nearly 65% of its value from its all-time high.

You don’t have to pick a speculative growth stock to ride the AI boom. Axcelis Technologies (NASDAQ: ACLS) caters to investors who aren’t afraid of risk and believe in comeback stories. It also has real revenue and profits, unlike NuScale Power.

Axcelis Technologies has increased by more than 180% over the past five years, but its shares have also declined by more than 50% from their all-time high, which was reached in 2023. Axcelis specializes in ion implantation, a technique that produces transistors in electronics. These transistors are essential for semiconductors to function, including those used in AI chips.

Since almost anything related to AI has experienced robust growth over the past few years, it may be surprising to see that Axcelis is still well below its 2023 highs. That’s because the company’s primary revenue driver was EV demand.

Being a key player in the EV industry worked well for Axcelis during the COVID-19 pandemic and shortly after it. In less than three years, Axcelis stock went from roughly $30 per share to briefly touching $200 per share. That was from 2021 to 2023.

EV sales have slowed down since 2023, and Axcelis’ stock price movements from mid-2023 to the end of 2024 reflect this. The expiration of EV tax credits in 2025 made it even worse, but Axcelis still managed a 16% gain over the past year.