Shares of NuScale Power (SMR 4.02%) surged as much as 12.3% in trading on Tuesday as the market continues to push nuclear energy stocks higher. Shares gave back some of those gains late in the day, but were still up 7.4% at 3:30 p.m. ET.
The nuclear boom continues
Over the past few weeks, tech and energy companies have come together to provide a bullish view on the future of nuclear energy. Microsoft and Constellation Energy announced the restart of a reactor on Three Mile Island, Oracle's CEO said the company will build three small reactors at a data center, and Constellation's CEO said artificial intelligence (AI) won't happen without nuclear energy.
NYSE: SMR
Key Data Points
There's clearly momentum behind the industry, which is driving stock prices higher right now. But will the industry deliver profits to justify rising stock prices?
Now it's time to deliver
The challenge for investors buying nuclear stocks today is the technology's potential is years and potentially decades away. Three Mile Island won't open until at least 2028, and it's not clear when small modular reactors will be available.
If you look at NuScale's revenue and free cash flow, there are not a lot of business operations to back up the rising value.
SMR Revenue (TTM) data by YCharts
I think nuclear energy could potentially provide value in the future, but its economic value for investors has been questionable for more than a decade. And until we see some more certainty I'm going to sit out this move into nuclear energy stocks.
