Should You Buy NuScale Power While It's Trading Below $31?

NuScale Power (SMR) shares have surged over 250% in the past year, driven by optimism around its small modular reactor technology and potential government support for nuclear energy. While the company reported $13 million in revenue with a $7 million gross profit for Q1 2025, high R&D and administrative costs mean the company is not yet profitable. A tentative deal to sell six reactors to RoPower, with a final investment decision expected later this year, represents a critical milestone, though project completion isn't anticipated until around 2030, indicating continued volatility for this story stock.

Analysis

NuScale Power (SMR) has experienced a significant share price appreciation, surging over 250% in the past year to reach all-time highs around $36, driven by optimism surrounding its small modular reactor (SMR) technology and supportive government policies for nuclear energy. Despite this market enthusiasm, the company's current financial footing is nascent; Q1 2025 revenues were $13 million, yielding a gross profit of approximately $7 million, which was insufficient to cover substantial research and development costs of $9 million and selling, general, and administrative expenses of $23 million, resulting in continued unprofitability. NuScale's core proposition—factory-built, transportable SMRs promising reduced costs, complexity, and enhanced safety—remains largely conceptual pending commercial validation. A critical near-term catalyst is the tentative agreement with Romania's RoPower for six reactors, with a final investment decision anticipated later this year; however, project completion is not expected until around 2030. This extended timeline, coupled with the company's reliance on future orders and the inherent volatility demonstrated by a prior 50% stock price drop in 2025, underscores its status as a speculative "story stock" primarily suited for investors with a high risk tolerance and a long-term conviction in its disruptive potential.

Key Decisions for Investors

• Investors should recognize NuScale Power as a high-risk, potentially high-reward investment, with its valuation heavily contingent on the forthcoming RoPower project decision and successful long-term commercialization of its SMR technology.
• Monitoring the RoPower final investment decision later this year is crucial, as a positive outcome could serve as a significant validation and catalyst, while a negative or delayed decision would likely lead to substantial downside pressure.
• Given the stock's more than 250% appreciation over the past year and its characteristic volatility, prospective investors might consider awaiting a potentially more favorable entry point, as suggested by the article's cautious tone on current price levels, or adopting a phased investment strategy.
• This equity is best suited for investors with a strong conviction in the future of SMR technology and a high tolerance for share price volatility, as profitability is not anticipated for several years and the path to market remains long and uncertain.