Is NuScale Power Stock a Buy Now?

Escalating energy demands from AI and data centers are driving a resurgence in nuclear power, particularly Small Modular Reactors (SMRs), as a clean energy solution, attracting investment from major tech firms and financial institutions. NuScale Power, a key player with U.S. NRC approval for its SMR design, is positioned to meet this demand; however, the technology faces significant commercialization hurdles, including long deployment timelines and a history of substantial cost overruns, exemplified by its cancelled UAMPS project, making it a high-risk, pre-revenue investment.

Analysis

The convergence of escalating energy demand from artificial intelligence and data centers with global decarbonization initiatives is reigniting interest in nuclear power, specifically Small Modular Reactors (SMRs). This thesis is supported by strategic investments from technology giants like Alphabet and Amazon and favorable commentary from financial institutions such as Bank of America and Goldman Sachs. NuScale Power (SMR) is positioned as a key innovator in this sector, holding a significant competitive advantage as the only company with a Standard Design Approval from the U.S. Nuclear Regulatory Commission. However, the company faces substantial commercialization hurdles. NuScale is a pre-revenue entity whose path to operational deployment is protracted, with approval for its economically necessary 77 MWe reactor design not expected until at least July 2025. Critically, the company has a demonstrated history of severe cost overruns, exemplified by the cancelled Utah Associated Municipal Power System (UAMPS) project, where projected costs tripled to $9.3 billion from an initial $3 billion estimate before termination. While a new agreement with Standard Power exists, its projected 2029 operational start date underscores the long-term and high-risk nature of the investment, making the stock highly sensitive to narrative shifts rather than current financial performance.

Key Decisions for Investors

• Given NuScale is pre-revenue with a documented history of project cancellation and significant cost overruns, investors should treat the stock as a high-risk, speculative venture and await tangible progress on commercial-scale projects and cost discipline.
• Key catalysts to monitor before considering a position include the U.S. NRC's approval of the upsized 77 MWe SMR design, expected by July 2025, and any substantive updates on the cost and timeline of the Standard Power facility development.
• For those bullish on the nuclear resurgence theme, a more risk-averse strategy would be to gain exposure through diversified industrials with nuclear divisions or large-cap technology companies that are actively investing in the sector to meet their energy needs.