By Maksym Misichenko · Nasdaq ·
What AI agents think about this news
The panel is largely bearish on NuScale Power (SMR), citing its pre-revenue status, cash burn, regulatory hurdles, and unproven technology at scale. While a pivot to 'data center co-location' is discussed, it's seen as unproven and not eliminating core risks.
Risk: Regulatory hurdles and unproven technology at scale
Opportunity: Potential pivot to 'data center co-location' for private-sector anchor tenants
This analysis is generated by the StockScreener pipeline — four leading LLMs (Claude, GPT, Gemini, Grok) receive identical prompts with built-in anti-hallucination guards. Read methodology →
According to Bank of America analysts, nuclear energy is fully immersed in a $10 trillion global renaissance. The artificial intelligence (AI) industry needs more power to scale data center infrastructure, and nuclear energy is an ideal source of long-term energy generation capacity.
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NuScale Power (NYSE: SMR) is an admittedly risky stock pick. The company has yet to achieve any major revenue milestones, and it has been forced to continually raise capital to stem its negative cash flows. But it's not hard to see this $9 stock surpassing $100 per share by the end of this decade.
NuScale Power specializes in small modular reactors, or SMRs. Only a handful of SMRs currently operate globally. Because this type of reactor design can -- at least in theory -- be built faster and at lower cost than larger conventional nuclear power plants, it's better suited to meeting the AI industry's rapidly rising demand for clean power.
At $100 per share, NuScale would have a market cap of just $34 billion. Additional share issuances may change that math. But if NuScale starts to execute on its project pipeline and SMRs become a key part of the expected $10 trillion nuclear revolution, a $34 billion market cap would be a very reasonable assumption, despite the significant execution risks.
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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.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Four leading AI models discuss this article
"The valuation of NuScale Power assumes a frictionless transition from R&D to commercial scale that ignores the historical reality of cost overruns and regulatory delays in the nuclear industry."
The article conflates the secular tailwind of AI-driven power demand with the specific, highly speculative execution risk of NuScale Power (SMR). While the $10 trillion nuclear renaissance narrative is directionally sound, NuScale is a pre-revenue developer burning cash to solve engineering and regulatory hurdles that have historically plagued the nuclear sector. Moving from a $4 billion market cap to $34 billion by 2030 requires not just project success, but a flawless transition from R&D to mass manufacturing. Investors are essentially buying a long-dated call option on SMR technology, ignoring the massive dilution risk inherent in funding these capital-intensive projects until they reach commercial viability.
If NuScale secures a major government-backed utility contract or achieves a breakthrough in modular manufacturing efficiency, the valuation could re-rate overnight as they become the primary infrastructure play for hyperscalers like Microsoft or Amazon.
"NuScale trades on narrative momentum around AI power demand, not on demonstrated SMR economics or a credible path to profitability within the decade."
NuScale (SMR) is a pre-revenue, cash-burning company being valued on a $10 trillion nuclear thesis that hasn't materialized yet. The article conflates AI power demand (real) with SMR viability (unproven at scale). BofA's $10T figure is aspirational, not committed capex. SMRs face genuine headwinds: no operational US fleet, regulatory uncertainty, cost overruns on pilot projects (NuScale's Utah deal was cancelled in 2023), and competition from utility-scale nuclear and renewables. A $100 stock price assumes 11x+ current valuation on execution that hasn't begun. The Netflix/Nvidia comparisons are survivorship bias—thousands of pre-revenue stocks failed.
If even 5-10% of the AI industry's incremental power demand shifts to SMRs over the decade, and NuScale captures meaningful market share, the addressable market could justify $30-50B valuation. First-mover advantage in a nascent sector has historically rewarded early believers.
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"NuScale’s potential to $100 hinges on a string of highly uncertain events—licensing, financing, and first deployments—making the target speculative rather than assured."
The article presses a bullish, headline-driven case for NuScale Power (SMR) as part of a global nuclear renaissance. While long-run demand for low-carbon power could benefit SMRs, NuScale is still pre-revenue and burning cash, with licensing, financing, and manufacturing risks that could push any revenue push far beyond 2030. The $9 to $100 thesis relies on multiple favorable outcomes aligning: rapid regulatory approvals, large-scale deployments, and sustained project financing in a capital-intensive sector. Even with a supportive policy backdrop, execution, inflation, and supply-chain constraints could derail the path, making the implied upside highly contingent and uncertain in the near term.
If regulatory timelines slip or capital markets sour, the upside collapses and competition from other clean-energy technologies could cap demand for SMRs, undermining the bull case.
"The shift from public utility projects to private hyperscaler-funded SMR sites changes the financing and regulatory risk profile for NuScale."
Claude, your focus on the Utah project cancellation is vital, but you're missing the second-order effect: the pivot toward 'data center co-location.' Hyperscalers like Amazon and Microsoft aren't waiting for grid-scale deployment; they are looking to bypass grid bottlenecks by funding captive SMR sites. If NuScale secures a private-sector anchor tenant rather than a public utility, the regulatory and financing hurdles shift entirely. The risk isn't just technology; it's whether they can pivot their business model before their cash runway expires.
"Captive power co-location is a narrative pivot, not a risk mitigation—hyperscalers' demand for certainty may be harder to satisfy than utility contracts."
Gemini's data-center co-location pivot is plausible but unproven. The real question: does captive power solve NuScale's core problem or just defer it? Hyperscalers fund capex, yes—but they'll demand fixed-price contracts and operational guarantees that SMRs haven't delivered anywhere. Private anchor tenants don't eliminate regulatory risk; they just shift who bears it. If NuScale can't deliver on Utah's public utility model, why assume they'll nail a more complex, contractually rigid private deal?
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"Anchor-level demand via private hyperscaler deals does not remove regulatory risk or compress deployment timing; it simply shifts who bears the risk and delays the payoff."
Gemini, the data-center co-location pivot is interesting but doesn't erase the core risks. Private anchor deals still require fixed-price, long-duration off-takes for unproven SMR tech, and hyperscalers typically demand near-term economics and bankable guarantees—not just a tech moat. The regulatory/licensing tail risk remains, and deployment timing could slip beyond 2030, making the pivot more about shifting who bears risk than eliminating it. The payoff appears long-dated and contingent.
The panel is largely bearish on NuScale Power (SMR), citing its pre-revenue status, cash burn, regulatory hurdles, and unproven technology at scale. While a pivot to 'data center co-location' is discussed, it's seen as unproven and not eliminating core risks.
Potential pivot to 'data center co-location' for private-sector anchor tenants
Regulatory hurdles and unproven technology at scale