NuScale Power: Understanding the Small Nuclear Reactor Story (Explained Simply)

What’s Happening with NuScale Lately?

Imagine a company that wants to build smaller, factory-made nuclear power plants called Small Modular Reactors (SMRs) – think of them as Lego-like nuclear units that can be put together on-site. NuScale Power is one such company.

Recently, people are looking at NuScale more closely because of some trouble:

• Project delays: Their plans are taking longer than hoped.
• Weak operational results: The business isn’t making money yet, and recent results were poor (including a deeper loss in the first quarter).
• Class action lawsuits: A group of people (likely investors) have joined together to sue the company.
• No binding customer contracts: They don’t yet have official, signed promises from customers who will definitely buy their power.
• All this shows they are still far from building many reactors and selling power at a large scale.

Important: Even though NuScale has a special U.S. government safety approval (the first of its kind!) and a partner to sell their reactors worldwide, the long wait to actually deliver power and unknown risks clash with the growing need for nuclear energy from AI data centers (huge computer buildings that need lots of electricity).

Why AI Data Centers Care About Nuclear

Big computer warehouses that run AI (like the brains behind chatbots) need massive amounts of steady power. Nuclear energy can provide that. NuScale hoped to sell to them. But because NuScale is delayed and hasn’t locked in contracts, the mismatch between hope and reality is growing.

We’ll now look at how these delays and missing contracts change the earlier story that NuScale would quickly start selling reactors.

(By the way, if you’re curious about other AI investment ideas beyond giants like Nvidia and Microsoft, there’s a list of 16 smaller AI-focused companies with strong growth potential.)

NuScale Power Investment Narrative Recap

If you buy a share of NuScale today, you are basically saying: "I believe their approved SMR design and global partnerships will eventually bring in real money from signed contracts, even though it takes a long time and they are losing money now."

The newest news makes one near-term event super important:

• They need to sign a first firm customer agreement (a real promise to buy).
• The risk is that the time to actually sell reactors and the money they burn while waiting could be even longer than people thought.

The Key Partner: ENTRA1 Energy

NuScale has an exclusive deal with ENTRA1 Energy. Think of ENTRA1 as the salesperson and builder for big projects, especially "behind the meter" projects for AI data centers.

• Behind the meter means making power right where it’s used (at the data center) instead of through the public grid.
• However, there are no binding power purchase agreements (official contracts to buy the electricity) and no clear schedule.
• This makes investors wonder: When (or will) these hoped-for projects actually happen?

Important: Behind the promising idea of first-of-a-kind SMRs and AI power demand, investors must remember there are unresolved execution risks around ENTRA1 and another partner, TVA (Tennessee Valley Authority).

You can Read the full narrative on NuScale Power (it’s free!).

The Money Numbers They Project

NuScale’s own story predicts:

• $389.8 million in revenue (total sales) by 2029.
• $42.8 million in earnings (profit) by 2029.

Another analysis suggests their forecasts give a fair value of $15.36 per share, which is about 70% higher than the current price. You can Uncover how NuScale Power’s forecasts yield a $15.36 fair value.

Exploring Other Perspectives

There is a chart showing NuScale’s stock price over the last year (labeled "SMR 1-Year Stock Price Chart") that visualizes the ups and downs.

Before the recent setbacks, the most hopeful analysts thought NuScale could make:

• About US$941.3 million in revenue by 2028.
• About US$111.3 million in earnings by 2028.

That sunny picture is now in tension with today’s delays. It shows how wide opinions can be compared to the careful view that ENTRA1 and TVA might never grow as big as originally drawn.

You can also Explore 20 other fair value estimates on NuScale Power – some think the stock might be worth less than half today’s price!

Decide For Yourself

Don’t just follow the stock ticker symbol (SMR). Here’s a simple approach:

1. Dig into the data – look at the company’s reports and projections.
2. Compare different views – read both optimistic and cautious analyses.
3. Build your own conviction – decide what you believe based on facts, not hype.

Ready For A Different Approach?

Every day counts. These free picks are already gaining attention. See them before the crowd does: 16 smaller AI-focused companies with strong growth potential.

Summary

NuScale Power has a groundbreaking approved design for small nuclear reactors and a partner in ENTRA1, but it faces delays, lawsuits, losses, and no firm customer contracts. While AI data centers want clean steady power, NuScale’s timeline is uncertain. Their own projections see modest profit by 2029, and some fair-value math suggests upside, but other analysts warn of big risks and lower values. Always research and form your own view.

FAQ

Q1: What is a Small Modular Reactor (SMR)?
A: It’s a smaller, factory-built nuclear power plant that can be transported and assembled on-site. Think of it as a compact, scalable way to make nuclear energy.

Q2: Why is NuScale facing scrutiny?
A: Because of project delays, weak financial results, group lawsuits, and lacking binding contracts with customers who would buy their power. This makes people doubt how soon they can succeed.

Q3: Who is ENTRA1 Energy?
A: They are NuScale’s exclusive global partner for selling and deploying the reactors, especially for AI data centers. But without signed power contracts, their plans are uncertain.

Q4: What are the main risks for investors?
A: The biggest risks are that commercialization takes even longer, money burns faster, and partners like ENTRA1 or TVA may not deliver projects as envisioned.

Q5: What is the stock’s fair value estimate mentioned?
A: One narrative gives a $15.36 fair value (70% above current price), but other estimates warn it could be less than half the current price.

Disclaimer

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed include SMR (NuScale Power).

Feedback or concerns? You can Get in touch or email editorial-team@simplywallst.com.