Why Is NuScale Power Stock Blasting Higher?

Shares of NuScale Power (NYSE: SMR) surged 22.6% in early Wednesday trading and was still holding up about 10% through 1:20 p.m. ET. With today's gains, the nuclear energy stock has rallied over 25% just this week, as of this writing.

Today's catalyst for NuScale Power stock is a major announcement from none other than the U.S. Department of Army.

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The Army will deploy small nuclear reactors

The U.S. army has announced a "next-generation" nuclear power program called the Janus Program, which aims to deploy nuclear microreactors at military bases across the globe to generate steady, reliable power. Army Secretary Dan Driscoll and Energy Secretary Chris Wright announced the program at the Association of the U.S. Army (AUSA) conference in Washington.

Wright emphasized how powerful nuclear energy can be for defense installations and critical missions. "Ultimately, and not in the too far future, you'll be able to place a reactor at a forward-deployed base, produce multiple megawatts of power, so meaningful power, and it'll run for years, potentially decades, without any refueling or any reservicing," he told the AUSA Warriors Corner panel.

The U.S. Army will partner with the Defense Innovation Unit and the Department of Energy to build and test small nuclear reactors.

So why is NuScale Power stock soaring?

Here's the thing: Under Janus, the reactors will be commercially owned and operated.

NuScale Power is building exactly what the Army wants -- small modular reactors (SMRs) that are scalable and can be installed in compact spaces and remote locations to supply uninterrupted power. NuScale's SMR technology is, in fact, also the first to win design approvals from the U.S. Nuclear Regulatory Commission.

Could this indicate a possible partnership between the U.S. government and NuScale Power in the near future? I'm not ruling that out, though it's anyone's guess at this point. For now, NuScale Power has other contracts to execute.