NuScale Power (SMR) stock spiked 5% higher last week following the Tennessee Valley Authority’s announcement that it entered into a memorandum of understanding with investment and operating platform ENTRA1 Energy. The agreement commits ENTRA1, and thereby NuScale Power, to developing 6 GW of new nuclear generation capacity through its specialized energy plants, each powered by multiple NuScale Power modules.
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SMR’s CEO, John Hopkins, stated that under the agreement, SMR intends to meet America’s surging demand for reliable, carbon-free baseload power, powering AI data centers, critical mining, semiconductor manufacturing, and other energy-intensive industries.
However, there may be a slight catch. Persistent losses and execution challenges warrant caution. While shares are up ~96% year-to-date, they’ve been trending lower, shedding over 12% in the past month. I am Bullish on the stock, but prefer to wait for the slide in price to turn positive to provide a more attractive entry point.
The Evolution of Nuclear Power
NuScale Power is a nuclear technology company that specializes in designing, manufacturing, and deploying small modular reactors (SMRs). The company is targeting multiple markets, including electricity generation, data centers, district heating, hydrogen production, and desalination. This approach expands its addressable market beyond traditional power generation.
The company is the first and only U.S. company with an NRC-approved SMR design. This regulatory certification creates a significant competitive advantage in the marketplace. Its flagship product, the NuScale Power Module, generates 77 MW of capacity per unit and can scale up to 924 MW configurations by combining 12 modules in a single plant. This first-mover position comes at an ideal time as electricity demand rises from AI data centers and the clean energy transition accelerates.
According to analysts, NuScale Power’s modular reactor technology may well offer the kind of innovation city planners have been dreaming of, potentially terraforming the future of nuclear power generation in the U.S. Instead of offering stiff competition, SMR complements legacy facilities like the Enrico Fermi II Nuclear Power Plant on Lake Erie by offering scalable, next-generation capacity alongside established large-scale reactors.
NuScale’s landmark partnership with TVA—touted as “the largest SMR deployment program in U.S. history”—could prove transformative, especially given its exclusive global commercialization agreement with ENTRA1 Energy, as rising U.S. energy demand creates a long runway for growth.
The TVA deal demonstrates utility-scale demand and technology acceptance from major players, while strong U.S. government support for advanced nuclear technologies provides policy tailwinds. The company’s global reach positions it well to capture international opportunities as nuclear energy production ramps up worldwide.
SMR’s Mixed Financial Performance
In August, NuScale reported mixed financial results for Q2 2025. Revenue of $8.1 million marked an increase from $1 million in the same period the previous year, though it missed analysts’ projections. Operating expenses increased to $44.9 million, resulting in earnings per share of -$0.13, which was worse than what analysts expected (a loss of -$0.11 per share).
Management anticipates a further increase in operating expenses in the second half of 2025 as the power plant supplier prepares for commercial contracts and continues to develop its supply chain. Still, the company ended the second quarter with significant liquidity, as cash, cash equivalents, and short-term investments totaled $489.9 million.
Rich Valuation With Negative Short-Term Momentum
The stock’s current valuation appears relatively rich. It trades without a meaningful P/E ratio due to negative earnings; however, a P/S ratio of 71.52x far exceeds the sector average of 1.68x. Fair value ultimately depends on future contract pipeline success, project execution capability, and market adoption rates, leaving the shares subject to heightened volatility (as evidenced by the stock’s beta of 3.01).
Most recently, shares have exhibited negative price momentum, resulting in bearish price action below shorter-term moving averages. Still, the stock has enjoyed a longer-term strong positive trend, driving it up by over 356% in the past year. However, if the recent negative trend continues, the pullback in the stock could see it giving back a solid slice of those gains.
Is SMR a Good Stock to Buy?
Analysts following the company have maintained a cautiously optimistic view of the stock, with many increasing price targets following the TVA announcement. For example, Bank of America’s Dimple Gosai raised the price target on SMR from $36 to $38 while maintaining a Neutral rating on the stock. While she sees the small modular reactor opportunity ramping up to 343 GW by 2050, NuScale’s stalled customer progress raises a red flag.
In the more bullish camp, Canaccord’s George Gianarikas raised his price target from $44 to $60 and kept a Buy rating on the stock, noting the company’s deal with the Tennessee Valley Authority through the deployment of six ENTRA1 Energy Plants.
Overall, SMR is rated as a Moderate Buy, based on three Buy and seven Hold recommendations. The average 12-month price target for SMR stock is $42, representing a potential upside of over 20% in the 12 months.
Bullish on SMR’s Future, But Cautious on Entry Point
NuScale is an intriguing opportunity in the nascent small nuclear reactor industry. The historic TVA partnership demonstrates real utility demand while NRC certification validates its early mover advantage. However, current losses, execution risks, and a premium valuation suggested investors might want to temper their optimism with a recognition of the company’s current financial realities.
I am bullish on the potential of the nuclear renaissance, and NuScale’s technological advantage and expanding pipeline suggest it’s well-positioned to lead the market. It’s a deal with the TVA that validates its commercial opportunities. However, I would prefer to hold off on establishing a position until the recent negative price momentum subsides. There’s no need to catch a falling knife.