There's plenty of uncertainty swirling around the markets right now. Still, one thing we can count on in the long term is the growing energy demand.
From 2025 to 2040, U.S. power demand is expected to increase 3.5% annually, with new artificial intelligence (AI) data centers placing additional strain on the grid.
Enter NuScale Power (SMR 0.24%), a nuclear technology company developing small modular reactors (SMRs) that could help address those issues.
There's a lot of opportunity with this company, but the risks for investors are magnified as well.
Going nuclear
While long-term forecasts for the growth of the nuclear energy market range widely, the broad expectation is that businesses and governments will make huge investments into building out nuclear infrastructure.
Image source: Getty Images.
In a 2025 report, Morgan Stanley researchers projected that through 2050, "potential investments in the nuclear value chain will increase $2.2 trillion, up from the $1.5 trillion initially forecast."
NuScale has the only SMR technology approved by the U.S. Nuclear Regulatory Commission, giving it an early-mover advantage in a sector where trillions of dollars are expected to flow.
NYSE: SMR
Key Data Points
The key selling points of SMRs, in theory, are that they offer quicker development, lower costs, and greater flexibility in building location due to their smaller size compared to traditional nuclear reactors.
I say "in theory," however, because NuScale has yet to build any commercial reactors.
It has 788 patents pending or granted in 21 countries, and the company shared in a February investor presentation that it had 12 modules in production. NuScale also shared in that presentation that strengthening domestic nuclear supply chains and shortened regulatory timelines could offer tailwinds to its business.
Still be cautious
The biggest risk for investors in NuScale is that the company is at this point being valued largely based on what could happen in the future.
That's not abnormal for a high-growth company, but it's a greater cause of concern for one that also has yet to launch its main commercial product and operates in a highly regulated market.
NuScale does have revenue coming in from service and engineering fees, but compared to its losses, the $31.5 million in revenue it generated last year was inconsequential.
It does have some runway ahead to keep operations moving along, ending 2025 with $1.3 billion in cash, cash equivalents, and short- and long-term investments on the books.
The stock's recent trajectory has reflected the risky nature of this investment, as it has dropped over 37% in the last year.
NuScale's reactors could help meet the world's rising energy demands, but there are plenty of questions about how long it might be before those contributions start to happen. As such, this stock is most appropriate for aggressive investors who understand they'll be accepting significant risk in the hopes of a big payday down the road.
