NuScale Power Is Down 64% From Its Peak. Here's Why It Could Fall Further in 2026.

NuScale Power, a developer of NRC‑certified small modular reactors (SMRs), has seen a volatile share move—surging in 2025 and subsequently falling about 64% from its October peak—and faces near‑term selling pressure as long‑time investor Fluor monetizes its position. Fluor previously sold part of its stake for ~$605 million at an average price of ~$40/share and still holds 111 million Class B units (~39% equity) that it plans to convert to Class A shares and fully exit by end‑Q2; NuScale’s first planned commercial installation in Romania is a six‑module, 462 MW plant not expected online until ~2030. Fluor intends to deploy sale proceeds into a share‑repurchase program and other investments, a move that could weigh on NuScale’s stock while cash flows remain speculative.

Analysis

Market structure: Fluor's monetization creates immediate supply shock in SMR equity (111m shares, ~39% of equity) that should depress SMR's price into end-Q2 2026 and transfer value to contractors and capital-return beneficiaries like FLR which will deploy proceeds into buybacks. Winners: engineering contractors (FLR), uranium miners and utilities with forward SMR optionality; losers: retail/speculative holders of SMR and suppliers dependent on an early commercial ramp. Cross-asset: expect higher implied volatility in SMR options, modest bid for uranium spot and equities, and potential credit-positive optics for FLR improving its leverage metrics which can tighten its bond spreads.

Risk assessment: Tail risks include NRC or Romanian permit rejection, multi-billion-dollar cost overruns on first-of-class SMR builds, and political pushback leading to stranded assets — each could erase >50% of equity value for SMR. Timeline: immediate (days-weeks) — selling pressure until Fluor completes conversion/sales; short-term (3–9 months) — RoPower decisions and financing; long-term (to 2030+) — first commercial cash flows if plants operate. Hidden dependencies: Fluor remains a prime contractor on RoPower so its full exit could create execution misalignment or a buyer-seller conflict that affects project cadence.

Trade implications: Direct tactical: short SMR into the conversion/sale window (through put spreads to limit tail loss) and size small (1–2% portfolio) given skew; core long: FLR 2–4% thesis for 12–18 months funded by improving capital returns and potential share repurchase impact. Pair trade: long FLR vs short SMR to capture structural rotation; options: buy 3–6 month SMR put spreads 20–40% OTM or sell covered calls on FLR to enhance yield while holding a 12–18 month core long. Reallocate 1–3% from speculative cleantech into uranium miners/utility names that can monetize baseload demand.

Contrarian angles: The market underprices the positive signaling of Fluor's deal pipeline — Fluor selling equity to repurchase shares may increase its EPS and free cash flow yield, making FLR a candidate for re-rating if buybacks reach ~5–8% of market cap. The sell-off in SMR may be overdone by >30% relative to a fundamentals path where RoPower is approved; history (SPAC/lockup expirations) shows forced selling creates opportunistic entry points, not permanent impairment. Unintended consequence: forced NuScale deleveraging could accelerate strategic partnerships or M&A interest (utilities, national champions) — a material upside catalyst if it occurs before 2028.

Key Decisions for Investors

• Establish a tactical short SMR position sized 1–2% of portfolio via 3-month put spreads 25–35% OTM ahead of Fluor's conversion completion (expected by end-Q2 2026); target 30–50% downside and cap loss to predefined premium paid.
• Initiate a 2–4% long position in FLR (Fluor) over the next 30 days, target +25–40% total return over 12–18 months driven by buybacks and redeployments, with a stop-loss at -15% to protect against project execution shocks.
• Implement a pair trade: long FLR (2%) financed by short SMR (1%) to express contractor upside vs speculative SMR dilution; rebalance or close short when Fluor completes sales or SMR price discounts exceed 50% from current levels.
• Buy 3–6 month SMR put spreads (20–40% OTM) sized to 0.5–1% portfolio as volatility hedge; if RoPower or NRC approvals are announced, unwind puts immediately and reassess for a selective long-if-confirmed milestone (e.g., firm EPC contract + 30% project financing).
• Reallocate 1–3% from high-beta pre-revenue clean-energy names into uranium miners and Tier-1 regulated utilities (exposure to baseload capacity) over 3 months, as secular nuclear demand increases and offers lower execution risk than SMR equity.