NuScale is an advanced nuclear company aiming to build small modular reactors (SMRs).
It is the only U.S. nuclear company with an NRC-approved SMR design.
Without a first customer, NuScale’s future is uncertain.
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NuScale Power (NYSE: SMR) is a nuclear company with first-mover advantage: It’s the only reactor developer in the U.S. with a Nuclear Regulatory Commission (NRC) design certification for a small modular reactor (SMR).
Why does that matter? Well, SMRs are widely viewed as a vital part of clean energy, not just because they can supply carbon-free power (every nuclear company can do that), but because they can provide it from small, factory-built units that can be deployed where the grid can’t produce continuous power.
Think: mining sites, military camps, research facilities, and (the big one) AI data centers.
Other developers of small reactors, like Oklo and Nano Nuclear Energy, are still embroiled in regulatory processes that could take years before design approval is achieved. And yet for all that first-mover advantage, NuScale is still down almost 20% on the year.
What’s going on? Why isn’t NuScale exploding in value like everyone expected?
The first thing to know about NuScale is that, for all its potential, it hasn’t sold an SMR yet. True, NuScale has a potential first customer. RoPower, a Romanian project company, has announced interest in using six NuScale reactors for an SMR power plant in Doiceşti, Romania.
NuScale has also signed a memorandum of understanding (MOU) with ENTRA1 Energy to deploy up to 6 gigawatts (GW) of SMR power in connection with the Tennessee Valley Authority. This is encouraging, and yet neither has solidified into a signed contract with real dollars behind it.
Without SMRs in operation, or a timeline when they might be fired up for commercial use, this company could remain unprofitable. So, I’d approach NuScale cautiously. Investors should keep a close eye on the RoPower project, which is the closest thing to a sale that NuScale has. If that falls through — and it’s still possible that it can — the stock would likely plummet.
Investors with risk aversion are better off with a nuclear energy exchange-traded fund (ETF).
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