NuScale Power (SMR 0.36%) is trying to modernize the nuclear power industry. It has made significant progress on that front and is now working toward the commercialization of its product. Once it has its first customer, however, there could be a big change in the way Wall Street values the stock.
If you buy before NuScale reports first quarter earnings on May 12, you'll make sure you are in the door before the final contracts get signed on the first deal that's in the works.
What does NuScale Power do?
NuScale Power operates in the nuclear power industry, but it is really an upstart attempting to shake up the status quo. The technology it uses is quite similar to what is used to build large-scale nuclear power plants. The difference is that NuScale is scaling that down so that the reactors are smaller, safer, and can be built in a factory setting, reducing costs.
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This is a huge deal, and a lot of companies are attempting to do something similar. There are even a few companies attempting to use newer nuclear technology to do the same thing. But NuScale Power is "the only SMR technology with U.S. Nuclear Regulatory Commission ("NRC") design certification." In other words, it has a head start on all of the competition and it also looks like it could be the first company to market.
Given the risks involved with nuclear power, having an active reactor being used commercially will be an important stepping stone. It is likely to lead to more customers lining up to buy NuScale's small modular nuclear reactors. NuScale is so confident that it will see more demand shortly that it has already ordered a second batch of long-lead-time parts for reactors. Buying before May 12 will ensure that you own the stock before more good news comes out.
What's the big news to watch for from NuScale in 2025?
The thing is, the event that investors want to get ahead of is fast approaching. NuScale Power has an agreement in principle with RoPower, a Romanian power company. NuScale is set to provide six of its small modular reactors to RoPower, which will get linked together to create a 462-megawatt nuclear power plant. NuScale is already working on the reactors, notably by pre-ordering long-lead-time parts.
NYSE: SMR
Key Data Points
Updates on the progress with these first six reactors will be important to watch for. As will be the approval process in the United States, as NuScale is attempting to get a larger reactor model through the regulatory process. But the really big news will likely come later in the year when RoPower makes the final decision on the nuclear power plant capital investment it is planning.
If the plant gets the go ahead from RoPower, NuScale Power will have its first official sale. And that will change the math on the company in a fairly substantial way for both investors and potential customers. But don't think that only means utilities, because a small nuclear reactor could be used to power just about anything, from a data center to a factory, that needed reliable, always-on power.
Getting one NuScale reactor up and running could open up a floodgate of demand. And that would likely lead to a material backlog of work to be completed, which would get priced into the stock fairly quickly on Wall Street.
Being early comes with risks with NuScale Power
Buying before May 12 will not be the best option for most investors. It is something that only aggressive investors should consider. If everything goes as hoped, buying early could lead to big gains in NuScale's stock. But there is always a risk that things don't work out as hoped.
More conservative investors will probably be better off waiting for more concrete progress, simply watching for key updates during the first quarter earnings call. If you have a glass-half-full point of view of NuScale's future, however, getting in before the news will likely mean bigger profits.
