NuScale Energy Faces Challenges Amid Market Fluctuations
NuScale Energy stands out as the sole U.S. company with an approved small modular reactor design from the Nuclear Regulatory Commission. However, the company has yet to secure its first official client, and its earnings remain quite low.
At the start of 2025, NuScale Power, trading under the ticker (NYSE:SMR), was one of the most sought-after stocks. By mid-October, however, the company faced scrutiny, particularly concerning its first mover advantage; it even showed promise in powering artificial intelligence data centers. Yet, that initial exuberance has since faded. Once valued at roughly $57 per share, the stock now hovers around $14, marking a significant 75% drop from its peak, with a 30% decrease just in December.
The question lingers: What’s next for NuScale? Is this a prime moment to invest?
Interestingly, NuScale isn’t alone in this downward trend; other nuclear companies like Oklo (NYSE:OKLO), Centrus Energy (NYSE:LEU), and Nano Nuclear Energy (NASDAQ:NNE) have also seen their stocks dip amidst rising concerns about an AI bubble. Among these advanced nuclear firms, NuScale has performed the worst this year.
If you had invested $10,000 in these companies at the start of the year, how much would they be worth today? It’s a revealing consideration.
Despite holding the only Nuclear Regulatory Commission design certification for small modular reactors in the U.S., NuScale is still awaiting its first major contract. There’s potential for a partnership with the Romanian company RoPower, but the absence of a confirmed sale has clearly impacted the company’s market valuation.
In its most recent financial quarter, NuScale reported a substantial loss, with a net income of $532 million. A silver lining is that about $475 million stemmed from the sale of shares, leaving around $754 million in cash and equivalents.
A key concern for investors is stock dilution. In mid-December, shareholders voted to increase the authorized share count from 332 million to 662 million. While this does not immediately mean more shares will be issued, it does allow NuScale the option to raise capital if necessary.
Caution is advisable when considering NuScale at this stage. There may be growth potential if the company can attract customers, yet success is not guaranteed.
Before diving into an investment in NuScale Power, it’s important to reflect on what analysts believe are better stock options available right now. NuScale was notably absent from the list of top recommendations by financial experts.
