Nuclear Market Revival: BWX Outshines NuScale
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3 days ago
0mins
Source: Fool
- Market Revival Trend: After a decade of stagnation following the 2011 Fukushima disaster, the nuclear energy market is experiencing a resurgence driven by the surging demand from AI and data centers, highlighting nuclear power's critical role in future energy structures.
- NuScale's Development Challenges: While NuScale's small modular reactors (SMRs) offer potential for building smaller nuclear plants in remote areas, their 77 MWe output is significantly lower than traditional reactors, and with commercial deployment not expected until 2030, its stock has plummeted over 50% in the past year.
- BWX's Growth Potential: As the only large-scale nuclear component producer in North America, BWX's year-end backlog grew 50% year-over-year to $7.3 billion, driven by strong demand for naval propulsion components and microreactors, with revenue and EPS projected to grow at CAGRs of 13% and 17% from 2025 to 2028.
- Investment Strategy Recommendation: Although NuScale may achieve larger growth in the future, current high Treasury yields and macroeconomic pressures make BWX, as a market leader with a robust business model, a more attractive investment in this uncertain market environment.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy SMR?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on SMR
Wall Street analysts forecast SMR stock price to rise
13 Analyst Rating
5 Buy
6 Hold
2 Sell
Hold
Current: 11.330
Low
18.50
Averages
32.77
High
60.00
Current: 11.330
Low
18.50
Averages
32.77
High
60.00
About SMR
NuScale Power Corporation is a provider of proprietary advanced small modular reactor (SMR) nuclear technology. The NuScale Power Module, the Company's SMR technology, is a small pressurized water reactor that can generate approximately 77 megawatts of electricity (MWe) or 250 megawatts thermal (gross) and can be scaled to meet customer needs through an array of flexible configurations of up to 924 MWe (12 modules) of output. In addition to the sale of NPMs, it offers a diversified suite of services throughout the development and operating life of the power plant. The Company's suite of services is planned to include licensing support, testing, training, fuel supply services and program management, among others. It serves a range of customers consisting of domestic and international governments, utilities, state-owned enterprises and technology and industrial companies in need of carbon-free, reliable energy.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
NuScale Power Approaches Critical Growth Milestone
- Major Partnership Agreement: NuScale Power has signed a deal with ENTRA1 and the Tennessee Valley Authority to build a 6-gigawatt small modular nuclear reactor, which, if successful, would become the largest in the U.S. and potentially the world, significantly enhancing the company's market position.
- Financing Challenges: ENTRA1 has received $25 billion in government funding to expand energy infrastructure, but its lack of experience and transparency in the nuclear sector poses risks for NuScale, potentially impacting its stock performance due to reliance on this partnership.
- Future Outlook: NuScale's CEO expects a power purchase agreement (PPA) to be finalized by the end of 2026, which would provide crucial legal assurance for the project's timeline and viability, potentially triggering significant milestone payments.
- Market Reaction: Although the uncertainty surrounding the project has pressured NuScale's stock price, achieving the PPA could rapidly improve market conditions, boosting investor confidence and driving stock price increases.
See More
NuScale Power's TVA Collaboration Emerges as Key Growth Catalyst
- Commercialization Catalyst: NuScale Power's collaboration with the Tennessee Valley Authority (TVA) and ENTRA1 Energy is advancing, potentially unlocking up to 6 gigawatts of nuclear deployment, which could become the largest nuclear project in U.S. history, significantly enhancing the company's market position.
- Power Purchase Agreement Progress: The parties are nearing a definitive power purchase agreement (PPA), and once finalized, NuScale expects to quickly initiate site-specific licensing work and OEM contracts, leading to early revenue generation and improved financial stability.
- Regulatory Advantage: NuScale has secured U.S. Nuclear Regulatory Commission (NRC) approvals for two small modular reactor designs, providing a competitive edge as customers increasingly prefer commercially deployable technologies over experimental options.
- Financing Support Potential: The project may receive investment backing from Japan and South Korea, particularly under the $550 billion U.S.-Japan investment framework, which will provide funding assurance for the TVA project and further propel the company's strategic development.
See More
NuScale Power Faces Major Turning Point
- Major Partnership Agreement: NuScale Power has entered into a deal with ENTRA1 and the Tennessee Valley Authority to construct a 6-gigawatt small modular nuclear reactor, which, if successful, would become the largest in the U.S. and potentially the world, significantly enhancing the company's competitive position in the nuclear energy market.
- Funding Prospects: ENTRA1 has been selected by the U.S. government to receive $25 billion in funding for scaling new energy infrastructure, part of a $550 billion agreement with Japan aimed at meeting rapidly growing energy demands, potentially providing crucial support for NuScale's project.
- Project Uncertainty: Despite optimistic funding prospects, ENTRA1's lack of experience in the nuclear sector and low information transparency raise investor concerns about its ability to successfully complete the project, putting pressure on NuScale's stock price.
- Future Outlook: NuScale's CEO expects a power purchase agreement (PPA) to be resolved by the end of 2026, which would provide critical clarity on the project's timeline and viability, and if successful, could significantly improve NuScale's market performance and stock price.
See More
Investment Analysis of Small Modular Reactor Companies
- Oklo's Strong Financials: Oklo boasts $2.5 billion in cash with no debt, providing a solid financial foundation despite not yet generating revenue, and it aims to deploy its Aurora microreactor by the end of 2027 to serve data centers and industrial facilities.
- NuScale's Legal Challenges: NuScale, the only SMR company with design certification from the U.S. Nuclear Regulatory Commission, is currently facing a class action lawsuit alleging it misled investors, which could significantly impact its reputation and finances, contributing to a nearly 30% drop in stock price year-to-date.
- Market Performance Comparison: While Oklo's stock has increased by 40% over the past year, it has still seen a decline of over 20% year-to-date, reflecting the high volatility in the small modular reactor sector, necessitating a high risk tolerance from investors.
- Investment Outlook Assessment: Currently, Oklo is viewed as the safer investment option with long-term growth potential and high-profile partners like Meta Platforms, whereas NuScale's legal issues increase its investment risk, warranting careful evaluation.
See More
Analysis of Oklo and NuScale Small Modular Reactor Competition
- Financial Strength: Oklo boasts $2.5 billion in cash and marketable securities, providing a robust balance sheet that supports its future growth despite not yet being profitable, ensuring its competitive edge in the nuclear energy market.
- Market Outlook: Oklo aims to deploy its Aurora microreactor by the end of 2027, targeting data centers and industrial facilities, which is expected to drive growth in its market share within the nuclear sector.
- Competitive Advantage: NuScale is the only small modular reactor manufacturer with design certification from the U.S. Nuclear Regulatory Commission; however, it faces a class action lawsuit related to its partnership with ENTRA1 Energy, which raises concerns among investors.
- Investment Risks: While both Oklo and NuScale stocks have experienced volatility over the past year, Oklo is viewed as the safer investment option due to its debt-free status and high-profile partners like Meta Platforms, whereas NuScale's legal issues increase investment risks.
See More
Year-End Investment Strategies and Tax Planning
- Focus on Winning Stocks: For instance, Alphabet (GOOG) has more than doubled in value over the past year, which may lead to it occupying a larger portion of an investor's portfolio, thus taking profits before year-end can mitigate risks and allow for better capital gains tax planning.
- Tax Loss Harvesting Strategy: With NuScale Power (SMR) shares down 50%, investors can sell at a loss to offset gains from other profitable stocks, effectively reducing tax liabilities while avoiding emotional decision-making and promoting rational investment strategies.
- Cash Reallocation: After trimming profits and harvesting losses, investors may find cash in their accounts, providing opportunities to buy new stocks or increase positions in existing investments, especially if certain companies have strong narratives that the market has yet to recognize, potentially leading to future gains.
- Portfolio Maintenance: Investors should regularly review their portfolios to ensure alignment with long-term investment goals, avoiding last-minute decisions before year-end, and it is advisable to conduct portfolio maintenance monthly or quarterly to keep investments orderly and effective.
See More
NuScale Power Approaches Critical Growth Milestone
- Major Partnership Agreement: NuScale Power has signed a deal with ENTRA1 and the Tennessee Valley Authority to build a 6-gigawatt small modular nuclear reactor, which, if successful, would become the largest in the U.S. and potentially the world, significantly enhancing the company's market position.
- Financing Challenges: ENTRA1 has received $25 billion in government funding to expand energy infrastructure, but its lack of experience and transparency in the nuclear sector poses risks for NuScale, potentially impacting its stock performance due to reliance on this partnership.
- Future Outlook: NuScale's CEO expects a power purchase agreement (PPA) to be finalized by the end of 2026, which would provide crucial legal assurance for the project's timeline and viability, potentially triggering significant milestone payments.
- Market Reaction: Although the uncertainty surrounding the project has pressured NuScale's stock price, achieving the PPA could rapidly improve market conditions, boosting investor confidence and driving stock price increases.
See More
NuScale Power's TVA Collaboration Emerges as Key Growth Catalyst
- Commercialization Catalyst: NuScale Power's collaboration with the Tennessee Valley Authority (TVA) and ENTRA1 Energy is advancing, potentially unlocking up to 6 gigawatts of nuclear deployment, which could become the largest nuclear project in U.S. history, significantly enhancing the company's market position.
- Power Purchase Agreement Progress: The parties are nearing a definitive power purchase agreement (PPA), and once finalized, NuScale expects to quickly initiate site-specific licensing work and OEM contracts, leading to early revenue generation and improved financial stability.
- Regulatory Advantage: NuScale has secured U.S. Nuclear Regulatory Commission (NRC) approvals for two small modular reactor designs, providing a competitive edge as customers increasingly prefer commercially deployable technologies over experimental options.
- Financing Support Potential: The project may receive investment backing from Japan and South Korea, particularly under the $550 billion U.S.-Japan investment framework, which will provide funding assurance for the TVA project and further propel the company's strategic development.
See More
NuScale Power Faces Major Turning Point
- Major Partnership Agreement: NuScale Power has entered into a deal with ENTRA1 and the Tennessee Valley Authority to construct a 6-gigawatt small modular nuclear reactor, which, if successful, would become the largest in the U.S. and potentially the world, significantly enhancing the company's competitive position in the nuclear energy market.
- Funding Prospects: ENTRA1 has been selected by the U.S. government to receive $25 billion in funding for scaling new energy infrastructure, part of a $550 billion agreement with Japan aimed at meeting rapidly growing energy demands, potentially providing crucial support for NuScale's project.
- Project Uncertainty: Despite optimistic funding prospects, ENTRA1's lack of experience in the nuclear sector and low information transparency raise investor concerns about its ability to successfully complete the project, putting pressure on NuScale's stock price.
- Future Outlook: NuScale's CEO expects a power purchase agreement (PPA) to be resolved by the end of 2026, which would provide critical clarity on the project's timeline and viability, and if successful, could significantly improve NuScale's market performance and stock price.
See More
Investment Analysis of Small Modular Reactor Companies
- Oklo's Strong Financials: Oklo boasts $2.5 billion in cash with no debt, providing a solid financial foundation despite not yet generating revenue, and it aims to deploy its Aurora microreactor by the end of 2027 to serve data centers and industrial facilities.
- NuScale's Legal Challenges: NuScale, the only SMR company with design certification from the U.S. Nuclear Regulatory Commission, is currently facing a class action lawsuit alleging it misled investors, which could significantly impact its reputation and finances, contributing to a nearly 30% drop in stock price year-to-date.
- Market Performance Comparison: While Oklo's stock has increased by 40% over the past year, it has still seen a decline of over 20% year-to-date, reflecting the high volatility in the small modular reactor sector, necessitating a high risk tolerance from investors.
- Investment Outlook Assessment: Currently, Oklo is viewed as the safer investment option with long-term growth potential and high-profile partners like Meta Platforms, whereas NuScale's legal issues increase its investment risk, warranting careful evaluation.
See More
Analysis of Oklo and NuScale Small Modular Reactor Competition
- Financial Strength: Oklo boasts $2.5 billion in cash and marketable securities, providing a robust balance sheet that supports its future growth despite not yet being profitable, ensuring its competitive edge in the nuclear energy market.
- Market Outlook: Oklo aims to deploy its Aurora microreactor by the end of 2027, targeting data centers and industrial facilities, which is expected to drive growth in its market share within the nuclear sector.
- Competitive Advantage: NuScale is the only small modular reactor manufacturer with design certification from the U.S. Nuclear Regulatory Commission; however, it faces a class action lawsuit related to its partnership with ENTRA1 Energy, which raises concerns among investors.
- Investment Risks: While both Oklo and NuScale stocks have experienced volatility over the past year, Oklo is viewed as the safer investment option due to its debt-free status and high-profile partners like Meta Platforms, whereas NuScale's legal issues increase investment risks.
See More
Year-End Investment Strategies and Tax Planning
- Focus on Winning Stocks: For instance, Alphabet (GOOG) has more than doubled in value over the past year, which may lead to it occupying a larger portion of an investor's portfolio, thus taking profits before year-end can mitigate risks and allow for better capital gains tax planning.
- Tax Loss Harvesting Strategy: With NuScale Power (SMR) shares down 50%, investors can sell at a loss to offset gains from other profitable stocks, effectively reducing tax liabilities while avoiding emotional decision-making and promoting rational investment strategies.
- Cash Reallocation: After trimming profits and harvesting losses, investors may find cash in their accounts, providing opportunities to buy new stocks or increase positions in existing investments, especially if certain companies have strong narratives that the market has yet to recognize, potentially leading to future gains.
- Portfolio Maintenance: Investors should regularly review their portfolios to ensure alignment with long-term investment goals, avoiding last-minute decisions before year-end, and it is advisable to conduct portfolio maintenance monthly or quarterly to keep investments orderly and effective.
See More
