NuScale Power (SMR 2.75%) has a very exciting technology around which it is attempting to build a business. The problem is that it still hasn't made its first official sale. Is it worth buying the stock while it's trading below $24, or is the risk just too high right now?
What does NuScale Power do?
NuScale Power has designed a small modular nuclear reactor (SMR). SMR technology could be an important step forward for the nuclear power industry. Traditional large-scale, site-built nuclear power plants are massive capital investment projects that require a lot of time to construct. The most recent U.S. nuclear power plants to be built, Vogtle 3 and 4, were years late and wildly over budget.
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An SMR is built in a factory, which is intended to make the building process safer and quicker. The smaller size of an SMR should make it less costly to build. A unit's size should also allow an SMR to be placed closer to population centers and easily transported where needed. The modular design would also allow SMRs to be linked to create larger power plants, which might interest electric utility customers.
SMRs would still be significant capital investments, but the benefits are alluring. For example, a data center supporting artificial intelligence, which uses a huge amount of electricity, could have its own dedicated SMR. That would save the data center from having to be connected to the power grid, a process that can take a long time and cause criticism because of the huge power demand of AI.
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NuScale Power's big idea has yet to land a home
NuScale Power has exciting technology to offer the world. What it doesn't have yet is a customer. This is a significant problem, as it needs to demonstrate that its SMRs work. The first official sale is likely to be a big turning point for the business, since it will likely make other customers more comfortable with NuScale's SMR technology.
NuScale Power has two potential customers lined up. A Romanian power company is currently considering up to six NuScale SMRs. NuScale is generating some revenue by offering consulting services to RoPower and engineering and construction company Fluor (FLR 3.25%) in the assessment effort. A final decision isn't expected until late in 2026 or in early 2027, roughly a year beyond earlier expectations.
Meanwhile, the Tennessee Valley Authority and ENTRA1 Energy are looking to use NuScale technology in U.S.-based power projects. So far, details are sparse.
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Key Data Points
Adding to the complexity is the fact that Fluor was an early investor in NuScale Power. It has been selling shares and plans to exit its position entirely in 2026. The first share sale occurred while NuScale's stock was near its 52-week high. However, the stock has fallen dramatically since, and Fluor's plan to sell more shares could be a lingering drag on the stock price until it is completed.
Buy only if you have a high tolerance for risk
When you consider the risks and potential rewards, NuScale Power is likely a stock that most investors should avoid. That's true even as it trades lower than $24 a share and far below its 52-week highs. Even aggressive growth investors might want to consider waiting until the company has a concrete agreement to sell its first SMR before making a purchase. Until that point, NuScale Power's stock price will largely be driven by emotions and news.
