Investing in Nuclear Power? I Like Nuscale Power Stock, Up 213% in 2025

Key Points

• Small modular reactors have strong growth potential.

• NuScale Power has a healthy lead on the competition.

• 10 stocks we like better than NuScale Power ›

So far this year, NuScale Power (NYSE: SMR) stock has more than tripled in value. The reason: rapidly rising interest in small-scale nuclear power. NuScale is arguably the leading developer of small modular reactors, with a quantifiable first-mover advantage. This lead could provide it with a decades-long runway of growth, fueled by another rapidly growing industry: artificial intelligence.

Small-scale nuclear is closer to reality than many think

Proponents of nuclear power as a scalable, renewable, low-carbon source of power have been repeatedly stymied by global events that have hindered nuclear power expansion. From reactor meltdowns to sudden tsunamis, public opinion has shifted heavily due to numerous public failures of nuclear technology. Public outcry and safety concerns caused regulatory scrutiny to soar across many parts of the world, leading to huge cost overruns and engineering delays for many major nuclear projects.

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The tides have turned yet again in recent years due to soaring energy demand from sectors like artificial intelligence -- a sector that is requiring ever higher amounts of energy to thrive and survive. Big tech, for example, is deploying billions of dollars into restarting old nuclear facilities, as well as building several new facilities across the U.S. According to the Harvard Business Review, big tech has gone "all in" on nuclear.

These projects could take many years to come to fruition, and only deep-pocketed entities like Big Tech can afford to see them through. That's partially why there's so much hype around small modular reactors: a newer generation of nuclear reactors that can be built in a factory off-site and delivered anywhere in the world. That's a huge advantage for power-hungry data centers located in cold, remote areas of the world -- an advantage for reducing cooling costs, but a problem when it comes to sourcing large amounts of reliable local energy.

Small-scale nuclear has been a dream for decades. But the reality of small-scale nuclear may finally be upon us. NuScale has the first and only SMR certified by the Nuclear Regulatory Commission for commercial production. Management believes the company's first order is just months away.

Image source: Getty Images.

NuScale Power is the obvious choice for nuclear investors

In 2023, the NRC certified the first-ever SMR for commercial production: NuScale's 50 MW model. Earlier this year, however, the company was able to gain certification for a larger 77 MW model. NuScale management thinks that its first order could be made official by this December -- less than 90 days from now. The company already has a dozen reactors under construction. This would allow it to fulfill one or two initial orders, given that the company expects customers to combine six to 12 modules into each operating facility.

To be sure, competition exists. But none have gained certifications from the NRC. Some companies, like Oklo, have begun the application process, but NuScale is safely one to three years ahead of the competition in this regard. That lead is especially true when considering that NuScale has already lined up nearly all of the necessary materials and outsourcing partners to begin fulfilling orders. NuScale management believes they could handle up to 20 orders per year as demand materializes.

Investors should be cautious regarding the timelines here. Even if NuScale receives an order in 2025, construction of the project wouldn't be completed until 2030 at the earliest. NuScale would, of course, receive revenue before that date. But there may not be a fully functioning, real-world use case of SMRs for another five years, a reality that may keep demand low in the meantime.

Still, NuScale is an exciting growth company that has a healthy lead on the competition. With a market cap of just $10 billion, the stock looks like a reasonable bet for patient investors, even after the strong run-up.

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Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool recommends NuScale Power. The Motley Fool has a disclosure policy.