NuScale Power’s Stock Jumps After Nuclear Deal Announcement

• NuScale Power’s share price has experienced a significant increase recently, attributed to a nuclear agreement linked to Meta Platforms.

• Interestingly, NuScale Power didn’t actually take part in this transaction, nor did other firms in the nuclear energy sector.

• It’s worth noting that stocks typically don’t produce immediate income or profits, making them a bit risky.

Shares of NuScale Power have surged by over 25% this week, according to data from S&P Global Market Intelligence. The increase in nuclear energy stocks has been fueled by new initiatives from Meta Platforms, even though NuScale Power isn’t part of this partnership. Despite a recent slump, the company’s stock has doubled over the last five years.

So, what’s behind NuScale Power’s dramatic rise this week, and should investors consider buying now?

This week, Meta Platforms announced its largest nuclear initiative to date, partnering to provide over 6.6 gigawatts of power aimed at supporting artificial intelligence (AI) data centers, which account for nearly 1% of the total electricity consumption in the United States. That’s a pretty substantial deal.

The partnership includes Vistra Corp, Oklo, and Terra Power, each contributing different levels of power over the next decade, centered in Ohio. While NuScale Power is not involved in this agreement, it does elevate expectations for the nuclear industry as a whole. Oklo, in particular, focuses on small modular reactors (SMRs), similar to those developed by NuScale Power.

Additionally, NuScale Power has revised its price target set by analysts, but this change doesn’t really reflect any fundamental shifts in the company’s operations.

It’s crucial to mention that NuScale Power has yet to construct a nuclear reactor and hasn’t secured any contracts for its SMR technology, despite its design being certified by the Nuclear Regulatory Commission (NRC). This detail may raise some concerns since it won’t be part of Meta’s recent nuclear deal.

While the stock has jumped, we remain skeptical about its underlying business. With a market capitalization of $6 billion and hardly any revenue, as well as a lack of significant contracts, it’s not a solid position. Nuclear contracts can take years to finalize, meaning that even if NuScale Power lands a contract, profits won’t come swiftly.

In short, it might be best to steer clear of this stock.

Before investing in NuScale Power, consider this: according to analysts from Motley Fool Stock Advisor, they’ve pinpointed other stocks that are poised for better returns, and NuScale Power isn’t among them. Their top ten stocks are anticipated to provide impressive growth in the coming years.