The artificial intelligence (AI) boom is fueling a nuclear renaissance. For the industry to grow, massive amounts of energy-intensive compute power will need to be built. As a low-carbon, high-baseload energy source, nuclear power is a promising solution.
NuScale Power (SMR +0.00%) is the only small modular reactor (SMR) developer in the U.S. approved by regulators to construct an SMR facility. SMRs are ideal for the AI data center build-out, given that they can be built more quickly and at a lower cost than conventional nuclear plants. This smaller footprint allows an SMR to be constructed near the data center infrastructure itself.
Despite growth potential, NuScale shares are down 40% this year. Skepticism is reasonable. Only two SMR systems currently exist worldwide. NuScale has never commercialized any of its SMR designs. Plus, the company already experienced a sizable failure in 2023 when its biggest customer (at the time) canceled its project.
While NuScale operates in an industry that should see long-term growth, the nuclear stock's future may hinge on a single upcoming catalyst.
SMR NuScale Power
NYSE · As of 4:00 PM ET 10/23/26
This catalyst could make or break NuScale Power stock
NuScale's technology has already been approved by U.S. regulators. The company is now waiting for a customer to commit financially to building an SMR system. NuScale already signed a non-binding deal with its financing partner, ENTRA1, and a major U.S. utility, the Tennessee Valley Authority (TVA), for a 6-gigawatt SMR facility. The deal is non-binding, however, allowing the partners to pull out at any time -- a risk that NuScale has faced in the past.
Image source: Getty Images.
The next step is for the TVA to sign a power purchase agreement, or PPA. That would commit the utility to buying long-term power from the project.
If secured, a PPA would validate NuScale's SMR designs, its go-to market strategy, and its ability to convert non-binding deals into revenue-generating projects. NuScale's CFO wants to get a deal done by the end of 2026. The signing of a PPA -- or the inability to do so -- should have a massive impact on NuScale's stock price, as well as its long-term future.
