Shares of NuScale Power fell 31% in August, following a significant rise earlier this year. Despite its impressive 432% gain over the last year and a market cap of $11.5 billion, the company generates minimal revenue and is experiencing financial losses. The excitement around nuclear energy, fueled by government support, has not translated into winning customer contracts outside of preliminary negotiations with a Romanian firm. With uncertain project pipelines and a volatile stock price, analysts suggest that NuScale Power poses substantial risks to investors.
NuScale Power (SMR -4.22%) is experiencing significant volatility as its stock price dropped by 31% in August, according to data from S&P Global Market Intelligence. This nuclear energy company, which designs small modular reactors (SMRs), has seen its valuation swing dramatically due to limited revenue generation and substantial financial losses. While the stock is up by 432% over the past year, trading at a market cap of $11.5 billion, it generates minimal revenue and continues to burn cash.
The surge in nuclear energy stocks earlier this summer was largely driven by the current presidential administration’s initiative to promote nuclear energy development to meet the energy demands of growing sectors, particularly artificial intelligence (AI). President Trump signed an executive order that supports advanced nuclear reactor technologies, including those developed by NuScale Power. Notably, NuScale is the only SMR company that has obtained design approval from the Nuclear Regulatory Commission (NRC), providing it with a potential advantage in securing contracts.
However, despite this head start, NuScale has yet to land any significant contracts beyond tentative discussions with a Romanian power company contemplating the use of SMRs for future energy needs. The company’s current zero-revenue status and its history of cash depletion contribute to its highly volatile stock performance. As the initial excitement surrounding the executive order begins to wane, the downturn in NuScale Power’s stock price becomes more understandable. The company lacks a firm financial foundation to support its lofty $11.5 billion market cap, making it a high-risk investment.
NuScale Power has several potential energy projects underway, including a proposal from the Tennessee Valley Authority, which could lead to real-world deployment of SMRs. However, even with project approvals, the timeline for generating revenue remains long, likely delaying any financial justification for the company’s current market valuation. Given the risks associated with investing in a company with such a high market cap and zero revenue, analysts caution potential investors against including NuScale Power in their portfolios.
https://www.fool.com/investing/2025/09/03/why-nuscale-power-stock-slid-31-last-month/