Could Buying NuScale Power Stock Today Set You Up for Life?

Key Points

• NuScale's small modular reactor could bring nuclear power generation to localized applications.

• The company must overcome nuclear energy's tainted reputation and numerous regulatory hurdles.

• Its stock price may currently reflect much of the company's realistic near-term potential.

• 10 stocks we like better than NuScale Power ›

According to the IEA's 2025 Global Energy Review, global energy consumption rose faster than its historical average in 2024. The rapid rise of artificial intelligence and the resulting surge in data center development are big reasons why.

These surging energy needs have helped revive interest in nuclear energy. While nuclear power isn't new, it does have some innovative developments, including small modular reactors (SMRs), which have smaller footprints and greater flexibility than traditional nuclear reactors.

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NuScale Power (NYSE: SMR) has designed the first and only small modular reactor to receive approval from the U.S. Nuclear Regulatory Commission. It opens up a potential opportunity, as experts estimate that renewed interest will drive a 50% increase in global nuclear energy capacity by 2050.

Can buying the stock today set you up for life? Here is what you need to know.

Image source: Getty Images.

NuScale offers nuclear energy in a smaller, more flexible package

Nuclear power generation involves using a fission reaction to generate heat, which in turn creates steam that turns turbines. Nuclear power plants aren't new, but they have a somewhat tarnished reputation. Nuclear energy is clean and efficient, but it can be catastrophic when things go wrong with the reactor -- the infamous Chernobyl disaster of 1986 comes to mind.

However, artificial intelligence has helped create such a dire need for energy that nuclear energy is back in the spotlight as a potential solution. NuScale Power's small modular reactor has a far smaller footprint than traditional reactors, just 76 feet by 15 feet per module. Each of NuScale's SMRs can generate 77 MWe (megawatts electrical), and up to 12 modules can come together to form a power plant.

Its form factor makes the module power plants ideal for localized applications, such as process heating, water desalination, hydrogen production, and data centers. It sounds like a great story at face value, and nuclear energy as a whole is likely to play a larger role in the global power grid over the next several decades.

How likely is all of this to translate to investment results? There are concerns

For starters, NuScale Power currently has an $11 billion market cap, yet the company has only generated $56 million in revenue over the past 12 months. In other words, investors buying the stock at this price are paying a substantial price for revenue and profits the company has not yet delivered.

The growth that investors are looking for may take some time to materialize. The company's 77 MWe design was only recently approved, and the module takes approximately three years to build. The mountains of red tape associated with nuclear energy also add time and potential pitfalls to the process of actually deploying these power plants.

Thus far, NuScale Power is generating revenue only from licensing and engineering fees associated with a contract for a potential Romanian power plant. Essentially, this is a contract for front-end legwork. There is no guarantee that the customer will actually follow through with the power plant.

Meanwhile, NuScale Power had a project with the Utah Associated Municipal Power Systems (UAMPS) that fell through in 2023 due to surging costs, which had squelched interest in moving forward. It seems that nuclear power plants remain challenging to sell, even in the form of small modular reactors.

Research from Precedence Research estimates that the global SMR market will grow from $6.88 billion last year to $16.1 billion by 2034. NuScale Power may be the only SMR company with approval in the United States, but Asia currently represents the majority of the market, where significant competition is already present.

Can buying the stock today set you up for life?

A life-changing investment often requires that the company you invest in significantly overdelivers on what you pay for the stock. For instance, Tesla was a life-changing investment for people who bought the stock years ago, as many had initially thought the company would fail, and the stock's valuation reflected it.

Unfortunately, NuScale Power -- with an $11 billion market cap and virtually no revenue or book of firm power plant orders -- is valued like a company that has already made it. It's the opposite situation for stocks that typically produce life-changing returns.

So no, buying NuScale Power today will probably not set you up for life. The business has far more to prove, or the stock price must come down to justify the risks.

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