Prediction: This Is What Comes Next for Nuclear Energy Stocks Like NuScale Power Corporation
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It is not all sunshine and rainbows for these high-flying stocks.
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July 8, 2025
03:15 AM
The Motley Fool
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It is not all sunshine and rainbows for these high-flying stocks
Investors can't seem to get enough of nu energy stocks
NuScale Power Corporation (SMR 2. 65%) is up 162% in the last year, driven by a growing political and economic narrative increasing nu power generation in the United States, as well as in other countries
Its small modular reactor design has not been implemented fully yet, but the company still has a market cap of over $10 billion
Here's my prediction for what comes next for NuScale Power stock and whether you should buy it for your portfolio today
Growing hype around nu power Artificial intelligence (AI) requires immense amounts of reliable electricity to power data centers
The United States government is now trying to incentivize construction on nu power given how consistently the nology can der carbon-free electricity
In May, President Trump signed an executive order aiming to bring back growth to the dying nu energy market in the United States
The order has a goal of bringing America's nu power generation from 100 gigawatts today to over 400 gigawatts in 2050
If the United States is to succeed in this goal, it will need to invest billions of dollars into new nu energy facilities
NuScale Power stock jumped on the news and is trading near all-time highs as of this writing on July 6, 2025
The company believes it is in prime position to quickly der growth to the nu energy sector with its small modular reactor
It is the only small reactor that has apval from the Nu Regulatory Commission (NRC)
NuScale believes can der in a scalable fashion -- this is why the reactors are called modular -- and in a 36-month construction time
Thirty-six months may seem a long time, but this is quick for the nu energy market
Image source: Getty Images
A lot of talk, little execution NuScale makes a lot of claims how mising its nology will be for the electricity-generation market
So far, there's been zero gress in getting any customers for its small modular reactor nologies
To be fair, the company does say it is confident a customer will commit to an order once its new larger design gets apved by the NRC
In fact, the company did have a ject in the works in Idaho for six nu power modules, but it was cancelled because of a lack of demand
The Department of Energy (DOE) has funded NuScale Power with $600 million, but it still cannot make its ducts work economically compared to competing energy-generation sources
It also had a posed ject in Utah that was cancelled because of cost overruns
NuScale will never be able to generate a fit for holders if it cannot start selling modular reactors to customers
This is why the company only generates $49 million in revenue a year from doing ject studies and getting grants; this essentially means the company is pre-revenue until it can get an order from customers
It has stemmed its cash burn to just $98 million a year in negative free cash flow, but this is simply because of cost cuts internally, which will slow down its development gress
NuScale is in between a rock and a hard place when it comes to bringing its nu energy ducts to market, something that should alarm holders
SMR Revenue (TTM) data by YCharts
Here's what comes next for NuScale Power stock NuScale Power stock has been one of the top performers of the last year
However, that does not mean you should rush out and buy the stock with the crowd today
The company is years away from completing a ject
It has been working to find a new customer order, not a good sign when you believe you have invented a better way to generate electricity in a cost-efficient manner
Even if NuScale Power does find a customer, it will be many years before the ject is
This will keep the company burning cash and losing money for ly the rest of this decade
Plus, it trades at a high valuation even if you believe the company will eventually be building a bunch of modular reactors every year
At a market cap of $10 billion, the stock has a wildly expensive price-to-sales (P/S) ratio of 77
It is not the company will have extremely high fit margins a software company, either
Nu energy is expensive to build, and the entire utility/energy sector runs at low margins for a reason: It is hypercompetitive and capital intensive
My prediction is that NuScale Power stock struggles over the next few years, with negative -price performance that ly will greatly disappoint investors
The same can be said for other nu energy stocks in the same boat
Brett Schafer has no position in any of the stocks mentioned
The Motley Fool recommends NuScale Power
The Motley Fool has a disclosure policy.
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