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NuScale Power's stock is up 330% over the past year, down 30% from its peak, and experienced a nearly 60% drawdown in between.
There are some stocks that are fairly boring. And then there are stocks like NuScale Power (SMR 0.05%), whose shares have risen dramatically over the past year. But that 52-week period has included huge price moves that would make most investors a little queasy. Here's what this roller coaster ride has looked like and why more-aggressive investors might still want to jump aboard.
NuScale Power's big aspiration is to build small-scale modular nuclear reactors, or SMRs. These are basically just a scaled down version of a site-built nuclear power plant, but they include all of the modern safety bells and whistles and are constructed in a factory. They could be a game changer for the nuclear power industry.
Image source: Getty Images.
Site-built nuclear reactors are large, complex, and expensive capital investments. And when something goes wrong at a site-built reactor, it is normally headline news.
SMRs are expected to be easier to build because they are made in assembly-line fashion. They are also smaller, so they cost less. The size also allows them to be easily transported to where they are needed and, when you add in modern safety features, they can be placed closer to population centers. If one unit isn't enough, meanwhile, you can string a few modules together to create a larger power plant.
It is a great technology, and there could be a huge market for SMRs, with demand coming from areas like data centers and electric utilities. The problem is that NuScale Power has yet to sell a single SMR. It is still just a money losing start-up with little more than a good story.
The last 52 weeks have been a thrilling roller coaster ride. The stock is up more than 330% over the entire time span. But along the way, it has experienced a 40% decline followed by a nearly full recovery. Then came a nearly 60% decline, followed by a full recovery that brought the stock to new all-time highs. And now it is in the middle of another drawdown that has left the shares 30% below the 52-week high they reached in late July.
For most investors, and particularly those with a conservative bent, NuScale Power isn't going to be appropriate. But for aggressive growth investors, there's actually good reason to be excited about the long-term future of the business.
The technology is the first thing, but that's just a foundational issue that would be true of any company trying to build SMRs. NuScale Power says that it remains the only technology provider to obtain Nuclear Regulatory Commission design approval, which the company believes puts it ahead of its competition in bringing its product to market.
That's a good start, but the real story is the deal that the company has to sell six of its units to RoPower, a Romanian utility company. With NuScale Power's help, it is working through the final decision process on whether or not to commit to building the nuclear power plant that would use NuScale's reactors.
The final decision is expected in late 2026 or in early 2027. That timeline has been pushed out from earlier estimates, which helps explain at least some of the volatility in the company's share price.
What's so important about the RoPower deal is that it would give NuScale Power its first customer win. That would not only give it a venue to showcase its technology, but it should also make it easier to ink the next deal. Management has already started to order parts for the RoPower reactors and a handful more, so it is clearly expecting the first deal to be a turning point.
And if it is, this upstart could quickly build a valuable backlog that might take its income statement from bleeding red ink to sustainable profitability. For the right investors, this could be an enticing opportunity to get in on the ground floor of an exciting technology development. But that's only if they understand the risks, from the chance that NuScale Power falls short of its goals, to the wild ride that the shares are taking while the company attempts to nail down its first customer.
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