NuScale Power (NYSE:SMR) stock jumped about 14% today, with the rally extending into after-hours trading, where shares added another 5%. The move was driven by a newly announced U.K. funding package aimed at accelerating the deployment of small modular reactor technology, a development that lifted sentiment across the nuclear sector.
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Trade SMR with leverageWhile the funding is not directed at NuScale itself, it reinforces the commercial outlook for the industry, showing that governments are becoming more willing to commit capital to next-generation nuclear projects as energy security concerns rise and demand for reliable, low-carbon power continues to grow.
At the same time, the surge comes as the broader market environment has turned more constructive, with risk appetite improving and investors showing a greater willingness to revisit longer-duration growth stories. In that context, NuScale fits neatly into a theme that blends energy security, decarbonization, and the rising power demands of data centers, all of which have been gaining traction again in recent sessions.
Yet, RBC analyst Chris Dendrinos is not convinced that this is the right moment to chase the stock. While he recognizes that NuScale is making progress, his overall stance remains cautious due to the long and uncertain path toward commercialization. The analyst notes that the company is “headed in the right direction with incremental progress,” but at the same time emphasizes that “the process to FID [Final Investment Decision] is lengthy,” highlighting a key challenge that continues to weigh on the investment case.
In practical terms, that means much of NuScale’s future still depends on factors that are not entirely within its control, particularly when it comes to project approvals and financing decisions. Dendrinos argues that while the direction is encouraging, the timeline remains stretched, making it difficult to justify a more bullish stance at this stage. The analyst also points to the financial implications of those delays, suggesting that extended timelines can increase the likelihood of equity dilution while also requiring a higher discount rate to reflect the added uncertainty.
That cautious view is reflected in his valuation framework, where he has trimmed his price target and raised his discount rate assumptions. This combination indicates that he sees a less attractive risk-reward profile, even as the company continues to advance its key projects. The progress around initiatives such as RoPower and ENTRA1/TVA is acknowledged as positive, but still early, with several milestones remaining before final investment decisions are reached and meaningful revenue visibility begins to take shape.
To this end, Dendrinos assigns SMR shares a Sector Perform (i.e., Neutral) rating, although his $14 price target still implies about 20% upside from current levels. (To watch Dendrino’s track record, click here)
What does the rest of the Street think? Looking at the consensus breakdown, opinions are somewhat divided. A mix of 5 Buys, 6 Holds, and 1 Sell adds up to a Moderate Buy rating. At the same time, the $17.39 average price target points to about 48.5% upside potential, suggesting that while conviction is mixed, many analysts still see meaningful room for gains if execution improves. (See SMR stock forecast)
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.