NuScale: A Reactor of Hope, Delayed

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The current enthusiasm for artificial intelligence, and the attendant demand for power, has occasioned a renewed, if somewhat belated, interest in nuclear fission. NuScale Power (SMR +1.82%), a company specializing in small modular reactors, finds itself in the peculiar position of being the only American firm with a design approved by the authorities. A distinction, naturally, that doesn’t necessarily translate to prosperity.

These smaller reactors, one gathers, are intended to be less burdensome to construct and, crucially, less expensive than the behemoths of the past. One might have hoped for a swift return on investment. Alas, the stock has suffered a decline of nearly forty per cent over the last year, a statistic that should give any prospective buyer pause.

Is the stock a worthwhile speculation? One suspects a good many investors will find themselves hesitating. The reasons, as is so often the case, are less technical than bureaucratic.

The Inherent Slowness of Progress

NuScale currently possesses the sole American regulatory approval for such a reactor. Its design, expandable to twelve modules, boasts a potential output of 924 megawatts of carbon-free electricity – a considerable figure, one admits.

President Trump, in a moment of executive zeal, signed orders calling for a quadrupling of American nuclear capacity by 2050. The Tennessee Valley Authority, ever eager to demonstrate its forward-thinking nature, subsequently entered into an agreement with ENTRA1 for up to six gigawatts of new capacity, utilizing NuScale’s plants. Enough, we are told, to power sixty data centers. A grand vision, certainly.

However, the nuclear industry, as any seasoned observer will confirm, is governed by a labyrinthine bureaucracy. Progress proceeds at a glacial pace, strangled by red tape. This, one suspects, is eroding NuScale’s first-mover advantage. It is a cautionary tale, familiar to anyone who has attempted to navigate the American regulatory landscape.

The company has been planning a six-module plant in Romania since 2021, its primary prospect aside from the Tennessee Valley Authority deal. Only recently, after years of deliberation, has the customer granted final approval for the first module, with commercial operations not expected until July 2033, and the completed plant in December 2034. This timeline, predictably, prompted a downgrade from TD Cowen analyst Marc Bianchi, and a corresponding sell-off. One begins to understand the reluctance of the market.

Therefore, enthusiasm for the Tennessee Valley Authority agreement must be tempered with a healthy dose of skepticism. It, too, will be subjected to the same protracted process, the same endless rounds of approvals and inspections. Years, one fears, will pass before any substantial return is realized.

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A Lottery Ticket, at Best

The current market capitalization of $4.3 billion appears rather optimistic, given the trailing-12-month revenue of a mere $64 million from design and engineering work. There are, as yet, no commercially operating modules on the horizon. A valuation, one might suggest, predicated more on hope than on reality.

The global SMR market is estimated to reach $8.2 billion by 2035, according to Spherical Insights. A modest figure, reflecting the inherent slowness of the industry. Perhaps it will accelerate in the coming years, as deployments increase and technology improves. One is not inclined to wager heavily on it.

The Tennessee Valley Authority deal, while possessing considerable eventual upside, remains a distant prospect. The Romanian deployment is equally far off. NuScale Power stock, at present, resembles a lottery ticket at best. Conviction, therefore, is difficult to muster. A prudent investor, one suspects, will remain on the sidelines.

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2026-02-18 18:13