NuScale Power’s Revolutionary Approach to Nuclear Energy
NuScale Power‘s (NYSE: SMR) small modular reactor (SMR) technology has the potential to transform the deployment of nuclear energy. Its modular design allows for factory construction of power modules, which can be easily transported to various sites, leading to significant reductions in both construction time and costs. Each unit operates independently, providing utilities with the flexibility to adjust capacity as demand changes.
-
NuScale is the first company to achieve certification for its SMR design from the U.S. Nuclear Regulatory Commission. The firm is focusing on high-demand sectors such as AI data centers, mining, and semiconductor manufacturing, all of which require substantial electricity resources.
-
Recently, NuScale engaged in a partnership with ENTRA1 to commercialize its power modules, aiming to provide reliable baseload power to industries like manufacturing and data centers.
-
This collaboration, while potentially scaling the operation, may also result in dilution for existing shareholders.
The stock has experienced significant fluctuations over the past year, peaking at $57 per share. As of Friday morning, it trades around $21 per share. However, potential investors should carefully evaluate several factors before making a purchase.
A key element impacting NuScale Power’s financial viability is its partnership with ENTRA1. Under this agreement, NuScale will deliver its power modules to ENTRA1 energy plants, which are designed to supply carbon-free baseload power for data centers and industrial applications.
This alliance positions NuScale with a valuable partner to broadly deploy its technology. Its small modular reactor technology was chosen under ENTRA1’s agreement with the Tennessee Valley Authority (TVA). NuScale CEO John Hopkins characterized it as a “historic agreement” and highlighted it as “the largest SMR deployment program in U.S. history.”
This partnership is also a strategic move following the cancellation of NuScale’s previous project, the Carbon Free Power Project in Idaho, which was halted in 2023 due to escalating costs. By collaborating with ENTRA1, NuScale can navigate the deployment of its technology without the hefty upfront debt typically associated with nuclear plant construction.
Though this arrangement reduces the financial strain on utilities, it places considerable pressure on both ENTRA1 and NuScale to secure funding for the project, which could significantly dilute current shareholder value. Analysts at BNP Paribas indicate that this agreement alters the valuation of NuScale, predicting that it could incur costs around $6 billion over the next 15 years under this deal.
In the third quarter, NuScale reported a cash outflow of $495 million related to its initial milestone payment to TVA. Additionally, shareholders agreed to increase the company’s authorized share count from 332 million to 662 million, suggesting that NuScale will likely continue using equity to meet future financial obligations, which poses a risk of further dilution.
It is important to note that the deployment of NuScale’s power modules is still in the nascent stages. The first TVA plant may not become operational until at least 2030, with subsequent plants expected to follow. Furthermore, NuScale’s RoPower project in Romania, anticipated to be its first operational SMR facility, is projected to open around 2028.
NuScale’s SMR technology indeed proposes a significant shift in nuclear power usage. Its modular approach could facilitate the deployment of smaller, efficient plants capable of powering factories or data centers.
However, this cutting-edge technology is still a few years away from commercial availability, and potential delays are common with innovative solutions. While the collaboration with ENTRA1 has great promise for scaling operations, it may be detrimental to current shareholders.
While the potential is appealing, it may be wise for most investors to hold off on purchasing NuScale Power shares until there’s tangible evidence of its operational viability in the coming years.
Before making a decision to invest in NuScale Power, consider the following:
The Motley Fool Stock Advisor research team has recently highlighted what they believe are the 10 best stocks that investors should consider now… and NuScale Power isn’t among them.
For context, if you had invested $1,000 in Netflix when it was recommended on December 17, 2004, you’d now have $464,439! Similarly, an investment in Nvidia when it was recommended on April 15, 2005, would have grown to $1,150,455!
It’s crucial to highlight that Stock Advisor’s average return stands at 949%, significantly outperforming the S&P 500’s 195%.
*Stock Advisor returns as of January 26, 2026.
Courtney Carlsen has no position in any of the stocks mentioned. The Motley Fool recommends NuScale Power. The Motley Fool has a disclosure policy.
Should You Buy NuScale Power While It’s Below $25? was originally published by The Motley Fool.
