Why Did NuScale Power Stock Pop Today?
Key Points
Britain is spending $805 million on SMRs -- with $29.9 billion more to come.
That's the good news. The bad news is it isn't spending it on NuScale SMRs.
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Shares of small modular (nuclear) power reactor-builder NuScale Power (NYSE: SMR) stock jumped 7.7% through noon ET on Tuesday -- not in reaction to anything NuScale did in particular.
Instead, shares of this nuclear power stock appear to be reacting to some positive news overseas.
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Good news for Rolls-Royce... is good news for NuScale, too?
The entire nuclear power sector -- red hot last year, but cooled off of late -- got another jolt of good news yesterday when World Nuclear News reported that Britain's "National Wealth Fund" has committed to funding Rolls-Royce's (OTC: RYCEY) SMR subsidiary with $805 million in support to develop small modular reactors (SMRs). And that's just the start.
The NWF is a U.K. public financial institution launched in October 2024 with the goal of investing up to $37.7 billion total in clean energy and industrial growth projects. Nearer-term, $805 million will be spent to support another government-owned organization, "Great British Energy-Nuclear," in its plan to buy three Rolls-Royce SMRs, rated at 470 MWe of power output each, and set them up on the island of Anglesey, North Wales.
Why is this good news for NuScale?
Well, as a matter of fact, this may not be good news for NuScale, despite investors apparently thinking that it is. On the surface, this is a story of Britain embracing nuclear power in general, and small modular reactors in particular, opening up the possibility he government will buy a few from NuScale.
As a UK-initiated project run through a UK-controlled organization that places its first order with a favored UK contractor, however... well, I suspect this actually bodes poorly for NuScale's chances of making SMR sales in the U.K.
I suspect the news is more a reason to sell SMR stock than to buy it.
Should you buy stock in NuScale Power right now?
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends NuScale Power and Rolls-Royce Plc. The Motley Fool has a disclosure policy.
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