Investors can't seem to get enough of nuclear energy stocks. NuScale Power Corporation (SMR 9.97%) is up 162% in the last year, driven by a growing political and economic narrative about increasing nuclear power generation in the United States, as well as in other countries. Its small modular reactor design has not been implemented fully yet, but the company still has a market cap of over $10 billion.
Here's my prediction for what comes next for NuScale Power stock and whether you should buy it for your portfolio today.
NYSE: SMR
Key Data Points
Growing hype around nuclear power
Artificial intelligence (AI) requires immense amounts of reliable electricity to power data centers. The United States government is now trying to incentivize construction on nuclear power given how consistently the technology can deliver carbon-free electricity. In May, President Trump signed an executive order aiming to bring back growth to the dying nuclear energy market in the United States. The order has a goal of bringing America's nuclear power generation from 100 gigawatts today to over 400 gigawatts in 2050.
If the United States is to succeed in this goal, it will need to invest billions of dollars into new nuclear energy facilities. NuScale Power stock jumped on the news and is trading near all-time highs as of this writing on July 6, 2025. The company believes it is in prime position to quickly deliver growth to the nuclear energy sector with its small modular reactor. It is the only small reactor that has approval from the Nuclear Regulatory Commission (NRC). NuScale believes can deliver in a scalable fashion -- this is why the reactors are called modular -- and in a 36-month construction time. Thirty-six months may seem like a long time, but this is quick for the nuclear energy market.
Image source: Getty Images.
A lot of talk, little execution
NuScale makes a lot of claims about how promising its technology will be for the electricity-generation market. So far, there's been zero progress in getting any customers for its small modular reactor technologies. To be fair, the company does say it is confident a customer will commit to an order once its new larger design gets approved by the NRC.
In fact, the company did have a project in the works in Idaho for six nuclear power modules, but it was cancelled because of a lack of demand. The Department of Energy (DOE) has funded NuScale Power with $600 million, but it still cannot make its products work economically compared to competing energy-generation sources. It also had a proposed project in Utah that was cancelled because of cost overruns.
NuScale will never be able to generate a profit for shareholders if it cannot start selling modular reactors to customers. This is why the company only generates $49 million in revenue a year from doing project studies and getting grants; this essentially means the company is pre-revenue until it can get an order from customers. It has stemmed its cash burn to just $98 million a year in negative free cash flow, but this is simply because of cost cuts internally, which will slow down its development progress. NuScale is in between a rock and a hard place when it comes to bringing its nuclear energy products to market, something that should alarm shareholders.
SMR Revenue (TTM) data by YCharts.
Here's what comes next for NuScale Power stock
NuScale Power stock has been one of the top performers of the last year. However, that does not mean you should rush out and buy the stock with the crowd today.
The company is years away from completing a project. It has been working to find a new customer order, not a good sign when you believe you have invented a better way to generate electricity in a cost-efficient manner. Even if NuScale Power does find a customer, it will be many years before the project is completed. This will keep the company burning cash and losing money for likely the rest of this decade.
Plus, it trades at a high valuation even if you believe the company will eventually be building a bunch of modular reactors every year. At a market cap of $10 billion, the stock has a wildly expensive price-to-sales (P/S) ratio of 77. It is not like the company will have extremely high profit margins like a software company, either. Nuclear energy is expensive to build, and the entire utility/energy sector runs at low margins for a reason: It is hypercompetitive and capital intensive.
My prediction is that NuScale Power stock struggles over the next few years, with negative share-price performance that likely will greatly disappoint investors. The same can be said for other nuclear energy stocks in the same boat.
