NuScale Power's SMR Tech Gains Traction: Will It Boost Revenue?

NuScale Power (SMR) is gaining traction in the small modular reactor (SMR) market, driven by increasing demand for carbon-free energy from data centers and interest from tech giants like Meta, Microsoft, Alphabet, and Oracle; data centers are projected to triple energy use by 2028, accounting for 12% of U.S. electricity consumption. Despite this momentum, NuScale faces stiff competition from Oklo and BWX Technologies, which are also advancing their SMR technologies and securing key partnerships and contracts. SMR stock trades at a premium with a forward 12-month Price/Sales of 119.98x versus the Computer & Technology sector’s 6.33x, and the 2025 consensus estimate for loss has widened to 42 cents per share.

Analysis

NuScale Power (SMR) is capitalizing on the burgeoning demand for reliable, carbon-free energy, particularly from the rapidly expanding data center sector, which is projected to triple its energy consumption in the next three years and account for 12% of U.S. electricity use by 2028. The company has garnered significant interest from major technology firms such as Meta, Microsoft, Alphabet, and Oracle, who are committed to incorporating SMR technology to meet their sustainability targets, thereby enhancing NuScale's market standing. NuScale has also reported progress in manufacturing and commercialization through partnerships with Doosan Interability and ENTRA1 Energy. However, the competitive landscape is intensifying, with rivals Oklo (OKLO) signing a memorandum of understanding in May 2025 for global deployment and BWX Technologies (BWXT) securing historic manufacturing contracts in 2025, both aiming to bolster their global market positions. Despite a remarkable 137% year-to-date surge in SMR's stock price, which significantly outpaces its sector and industry, the company trades at a steep forward 12-month Price/Sales multiple of 119.98X, far exceeding the Computer & Technology sector's 6.33X, and carries a Zacks Value Score of F. Furthermore, the Zacks Consensus Estimate for SMR's 2025 loss per share is pegged at 42 cents, having widened by a penny in the past 30 days, a notable negative swing from the 42 cents per share earnings reported in the year-ago quarter, indicating potential headwinds for profitability.

Key Decisions for Investors

• Investors should acknowledge NuScale's significant long-term growth potential driven by demand for carbon-free energy in sectors like data centers, but must weigh this against the stock's extremely high valuation and the recent widening of its estimated loss per share.
• Closely monitor competitive advancements from Oklo and BWX Technologies, as their progress in securing global deployment deals and manufacturing contracts could materially impact NuScale's market share and future growth trajectory.
• Given SMR's substantial year-to-date share price appreciation alongside a deteriorating earnings outlook from profit to loss, exercise caution due to the elevated risk profile, and consider awaiting more favorable entry points or tangible progress towards profitability before committing new capital.