Small Modular Reactor Stocks: Potential and Risks
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 02 2026
0mins
Source: Fool
- Market Potential: According to a report from Bank of America, the nuclear energy market is projected to become a $10 trillion opportunity, particularly as AI and data center electricity demands surge, with nuclear being rediscovered as a key solution to global power shortages.
- Investment Appeal: Despite Oklo and NuScale's stock prices falling over 10% and 20% respectively, their market valuations remain at approximately $10 billion and $4 billion, indicating attractive potential relative to their growth prospects, especially with the rapid development of small modular reactor technology.
- Slow Technological Progress: NuScale received SMR design approval from the U.S. Nuclear Regulatory Commission in 2023, but its first system is not expected to be operational until 2030, while Oklo's system is projected for late 2027 but lacks construction approval.
- Significant Financial Risks: With no revenue-generating customers, both Oklo and NuScale continue to incur quarterly losses, and over the past three years, both companies have seen their total outstanding shares increase by over 100%, indicating that investors must be cautious of shareholder dilution while pursuing growth.
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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 Faces Financing Challenges Amid Growth Potential
- Market Opportunities and Challenges: With a market cap of nearly $4 billion, NuScale Power faces financing difficulties, yet its nuclear technology aligns with the growing demand for AI, particularly in data center infrastructure, presenting significant growth potential.
- Project Financing Issues: The Romanian project is expected to cost between $6 billion and $7 billion, and despite receiving some government approvals, slow financing progress may delay the project's initiation and construction.
- Partner Support: NuScale's collaboration with ENTRA, which has secured $25 billion in government funding for a 6-gigawatt project in Tennessee, adds complexity as it remains unclear when these funds will be allocated to NuScale, increasing project uncertainty.
- Long-Term Investment Risks: Projects are not expected to achieve scalable power generation until 2030 or later, during which time NuScale will rely on debt and shareholder dilution to sustain operations, highlighting its high-risk investment nature.
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- 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.
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- NuScale's Development Status: NuScale focuses on small modular reactors (SMRs), with expectations that its first units won't be operational until 2030; analysts project revenue growth from $31.5 million in 2025 to $310.7 million by 2028, although profitability is expected to remain elusive for the foreseeable future.
- BWX's Market Advantage: As the only large-scale producer of nuclear components in North America, BWX's year-end backlog grew by 50% year-over-year to $7.3 billion, with revenue and EPS projected to grow at CAGRs of 13% and 17% from 2025 to 2028, underscoring its competitive strength in the nuclear sector.
- Investment Risk Assessment: While NuScale has significant growth potential, its market cap of $3.92 billion and trading at 13 times 2028 sales expose it to risks from competitors like BWX, leading investors to prefer BWX as a more stable investment amid high Treasury yields and macroeconomic uncertainties.
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- Business Model Advantage: Oklo's differentiated 'build-own-operate' model positions it as a potential leader in the small modular reactor (SMR) sector, uniquely capturing project economics by owning its reactors and pursuing long-term contracts with energy-intensive customers like data centers.
- Strong Market Demand: The binding power agreement of approximately 1.2 GWe with Meta and a pipeline exceeding 14 GWe under non-binding customer letters indicate robust demand for Oklo's offerings, making it one of the largest players in the SMR market.
- Significant Competitive Edge: With the demonstration reactor on track and agreements with hyperscalers, BofA believes Oklo possesses a compelling advantage in capturing opportunities in this rapidly growing market.
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- Optimistic Market Outlook: By the end of 2025, Fluor's backlog reached $25.5 billion, with over 80% consisting of reimbursable contracts, and the ongoing growth in cloud, AI, and nuclear markets is expected to provide additional tailwinds for the company.
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- Reasonable Valuation: With a current stock price of $42 and a forward P/E ratio of 13, while it may not achieve millionaire-making gains over the next decade, Fluor could still match or exceed the S&P 500 if it continues its streamlining strategies and increases share buybacks.
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- Innovative Nuclear Technology: The startup is pursuing a novel approach by placing reactors deep underground, which aims to reduce construction costs and enhance safety compared to traditional above-ground nuclear facilities, potentially attracting more investor interest.
- Strong Market Demand: As electricity demand surges from artificial intelligence and data centers, investor appetite for nuclear startups remains robust, with Deep Fission's filing indicating a growing willingness among public investors to fund early-stage nuclear technology despite regulatory hurdles and capital requirements.
- Industry Recovery Signal: Following X-Energy's successful IPO, the nuclear startup IPO market is gradually reviving, and Deep Fission's filing may further encourage institutional investors to support nuclear projects through traditional IPOs, fostering industry growth.
See More
NuScale Power Faces Financing Challenges Amid Growth Potential
- Market Opportunities and Challenges: With a market cap of nearly $4 billion, NuScale Power faces financing difficulties, yet its nuclear technology aligns with the growing demand for AI, particularly in data center infrastructure, presenting significant growth potential.
- Project Financing Issues: The Romanian project is expected to cost between $6 billion and $7 billion, and despite receiving some government approvals, slow financing progress may delay the project's initiation and construction.
- Partner Support: NuScale's collaboration with ENTRA, which has secured $25 billion in government funding for a 6-gigawatt project in Tennessee, adds complexity as it remains unclear when these funds will be allocated to NuScale, increasing project uncertainty.
- Long-Term Investment Risks: Projects are not expected to achieve scalable power generation until 2030 or later, during which time NuScale will rely on debt and shareholder dilution to sustain operations, highlighting its high-risk investment nature.
See More
Nuclear Market Revival: BWX Outshines NuScale
- 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.
See More
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- Market Revival Context: After a decade of stagnation following the 2011 Fukushima disaster, the nuclear energy market is experiencing a resurgence driven by the surging demand from artificial intelligence and data centers, rekindling interest in safer and more efficient reactors.
- NuScale's Development Status: NuScale focuses on small modular reactors (SMRs), with expectations that its first units won't be operational until 2030; analysts project revenue growth from $31.5 million in 2025 to $310.7 million by 2028, although profitability is expected to remain elusive for the foreseeable future.
- BWX's Market Advantage: As the only large-scale producer of nuclear components in North America, BWX's year-end backlog grew by 50% year-over-year to $7.3 billion, with revenue and EPS projected to grow at CAGRs of 13% and 17% from 2025 to 2028, underscoring its competitive strength in the nuclear sector.
- Investment Risk Assessment: While NuScale has significant growth potential, its market cap of $3.92 billion and trading at 13 times 2028 sales expose it to risks from competitors like BWX, leading investors to prefer BWX as a more stable investment amid high Treasury yields and macroeconomic uncertainties.
See More
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- Business Model Advantage: Oklo's differentiated 'build-own-operate' model positions it as a potential leader in the small modular reactor (SMR) sector, uniquely capturing project economics by owning its reactors and pursuing long-term contracts with energy-intensive customers like data centers.
- Strong Market Demand: The binding power agreement of approximately 1.2 GWe with Meta and a pipeline exceeding 14 GWe under non-binding customer letters indicate robust demand for Oklo's offerings, making it one of the largest players in the SMR market.
- Significant Competitive Edge: With the demonstration reactor on track and agreements with hyperscalers, BofA believes Oklo possesses a compelling advantage in capturing opportunities in this rapidly growing market.
See More
Fluor's Growth Potential Over the Next Decade
- Business Stabilization: From 2021 to 2023, Fluor shifted from fixed-price megaprojects to reimbursable contracts, allowing clients to cover labor, material, and equipment costs, which stabilized its operations; analysts expect EPS to turn positive again in 2026, with a projected CAGR of 3% through 2028.
- Optimistic Market Outlook: By the end of 2025, Fluor's backlog reached $25.5 billion, with over 80% consisting of reimbursable contracts, and the ongoing growth in cloud, AI, and nuclear markets is expected to provide additional tailwinds for the company.
- Significant Investment Returns: Fluor recently liquidated its remaining stake in NuScale, turning an initial $570 million investment into $2.43 billion, and is likely to use some of that cash for stock buybacks to enhance EPS, further boosting investor confidence.
- Reasonable Valuation: With a current stock price of $42 and a forward P/E ratio of 13, while it may not achieve millionaire-making gains over the next decade, Fluor could still match or exceed the S&P 500 if it continues its streamlining strategies and increases share buybacks.
See More
Deep Fission Files for IPO Amid Strong Demand for Advanced Nuclear Power
- IPO Plans: Deep Fission filed for an initial public offering on Wednesday, intending to offer 6 million shares on the Nasdaq Global Market at an estimated price range of $24 to $26 per share, potentially valuing the company at approximately $1.65 billion.
- Innovative Nuclear Technology: The startup is pursuing a novel approach by placing reactors deep underground, which aims to reduce construction costs and enhance safety compared to traditional above-ground nuclear facilities, potentially attracting more investor interest.
- Strong Market Demand: As electricity demand surges from artificial intelligence and data centers, investor appetite for nuclear startups remains robust, with Deep Fission's filing indicating a growing willingness among public investors to fund early-stage nuclear technology despite regulatory hurdles and capital requirements.
- Industry Recovery Signal: Following X-Energy's successful IPO, the nuclear startup IPO market is gradually reviving, and Deep Fission's filing may further encourage institutional investors to support nuclear projects through traditional IPOs, fostering industry growth.
See More
