Key Points
After a steep correction, NuScale Power (NYSE: SMR) — once one of the most promising nuclear energy stocks on the market — has seen its valuation fall below $4 billion. Last October, the company’s valuation was approaching $20 billion.
Even if NuScale Power stock simply reaches its former highs, there would be more than 400% in potential upside. Looking long-term, however, there’s reason to believe there could be 1,000% or more in growth potential, especially at today’s discounted price.
This story isn’t without risk. But there’s one clear path for NuScale Power stock to generate truly impressive returns.
Here’s how NuScale Power stock can enrich your portfolio
NuScale isn’t just any nuclear power developer. Its initial designs — which have already been approved by the Nuclear Regulatory Commission — are for small modular reactors, or SMRs. Only two SMRs are currently in operation globally, but the idea has been around for decades.
SMRs are getting renewed attention given rising energy demand throughout the world, a trend deeply influenced by the rise of AI and its energy-intensive data centers. For the AI industry to continue to grow, more data centers will need to be built. Over the next few years alone, $7 trillion is expected to be spent scaling data center infrastructure.
If this build-out occurs as anticipated, the current energy grid will be nowhere near suitable. In short, more energy generation capacity will be needed. And SMRs are, at least on paper, faster, cheaper, and easier to build than conventionally sized nuclear power plants.
Hype for SMRs was high late last year, sending the stock prices of NuScale Power and SMR competitor Oklo (NYSE: OKLO) soaring. That hype has died down recently, however, due to multiple factors. The chief factor may be the market’s realization that the SMR build-out may happen later and more slowly than initially anticipated. NuScale itself has faced several project delays, and neither NuScale nor Oklo actually has a commercial SMR system up and running.
NuScale investors, however, may get serious relief by the end of 2026. The company’s biggest project — a 6-gigawatt SMR system for a major northeastern U.S. utility operator — is expected to have a power purchasing agreement (PPA) signed by the end of the year. If that happens, the utility will be contractually obligated to buy power from the facility at a certain rate for years, if not decades to come.
Uncertainty surrounding NuScale’s growth runway would, therefore, abate considerably. This would help raise the stock price and significantly improve NuScale’s ability to raise more capital and execute on more projects. Bank of America values the nuclear revolution at $10 trillion globally over the long term. Even with plenty of execution and financing risk, it’s not hard to see NuScale taking a meaningful slice of that pie and dramatically growing its current $3.5 billion market cap.
Should you buy stock in NuScale Power right now?
Before you buy stock in NuScale Power, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and NuScale Power wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $418,761!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,195,804!*
Now, it’s worth noting Stock Advisor’s total average return is 918% — a market-crushing outperformance compared to 208% for the S&P 500. Don’t miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
Bank of America is an advertising partner of Motley Fool Money. Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool recommends NuScale Power. The Motley Fool has a disclosure policy.
