NuScale Power (NYSE: SMR) presents a compelling investment opportunity within the burgeoning small modular reactor (SMR) market. As the first and only company with a U.S. Nuclear Regulatory Commission (NRC)-approved SMR design, NuScale enjoys a significant first-mover advantage in a sector poised for substantial growth, driven by decarbonisation efforts, data centre proliferation, and the imperative for resilient energy grids.
Industry Overview
The global SMR market is projected to reach a substantial size by 2050, with estimates suggesting a total addressable market (TAM) of $120 billion, correlating with the International Energy Agency’s (IEA) forecast of approximately 1,200 SMR deployments by mid-century.1 In the nearer term, the serviceable available market (SAM) is estimated at $45 billion by 2030, fuelled by escalating demand from data centres and industrial electrification. Structural tailwinds, including stringent decarbonisation mandates, energy-intensive AI and data centre operations, and geopolitical energy security concerns, further underpin the increasing adoption of SMR technology.
Company Analysis
NuScale’s flagship product, the NuScale Power Module, a 77 MWe reactor, offers scalable power generation solutions ranging from single-unit deployments to multi-module plants of up to 924 MWe, catering to diverse needs across utility-scale power generation, data centres, and industrial processes like hydrogen production and desalination. The company’s revenue model encompasses licensing fees, engineering, procurement, and construction (EPC) services, and long-term operational support contracts. While primarily focused on the U.S. market, NuScale is actively expanding its presence in Europe and Asia-Pacific, forging key partnerships with entities like RoPower, the U.S. Department of Energy (DOE), and international utility companies.
Financially, NuScale reported Q1 2025 revenue of $42.3 million, a 23% year-over-year increase, primarily driven by engineering and fee income from the RoPower project.2, 4 Despite improved liquidity through capital markets activities, the company remains in a pre-revenue scaling phase, as evidenced by negative operating margins and a net loss.3, 4
Investment Thesis
Our investment thesis centres on NuScale’s unique position as the leading pure-play SMR company in a market primed for exponential growth. The company’s NRC-approved design confers a substantial competitive advantage, creating a high barrier to entry for U.S. competitors. The RoPower project serves as a crucial near-term catalyst, generating engineering and fee income while showcasing NuScale’s technology on a commercial scale. Longer term, the company is well-positioned to capitalise on the global transition to decarbonised energy solutions, particularly within the rapidly expanding data centre and industrial sectors.
Valuation & Forecasts
NuScale’s current valuation, while elevated compared to pre-revenue peers, is justified by its first-mover status and the long-term growth potential of the SMR market. A discounted cash flow (DCF) analysis, incorporating various deployment scenarios, supports our 12-month price target of $60. Our base case assumes five SMR plant deployments by 2030, generating $100 million in annual revenue per plant. A bull case, assuming ten deployments, yields a higher valuation, while a bear case, factoring in potential regulatory delays and limited RoPower traction, suggests a downside risk to $20.
| DCF Scenario | SMR Deployments by 2030 | Annual Revenue per Plant ($M) | Implied Valuation |
|---|---|---|---|
| Bull Case | 10 | 200 | $60 |
| Base Case | 5 | 100 | $40 |
| Bear Case | Limited RoPower Traction/Regulatory Setbacks | N/A | $20 |
Risks
Key risks include the company’s current pre-revenue financial position, potential regulatory delays, execution challenges associated with first-of-a-kind SMR deployments, and competitive pressures from emerging SMR players. While NuScale’s passive safety systems offer inherent advantages, they require thorough field validation. Furthermore, the company’s reliance on specialized nuclear manufacturing poses supply chain risks.
Recommendation
We recommend a Buy rating for NuScale Power with a 12-month price target of $60. The company’s regulatory lead, commercial progress with the RoPower project, and the favourable macro backdrop for nuclear energy in the age of AI and data centres underpin our positive outlook. However, investors should closely monitor the company’s cash runway and execution against key milestones.
1 International Energy Agency (IEA). (Various reports and projections on SMR deployment).
2 NuScale Power. (2025, Q1 Earnings Presentation). https://40210592.fs1.hubspotusercontent-na1.net/hubfs/40210592/Website/Investors/2025/SMR-1Q25-Presentation.pdf
3 MarketBeat. (2025, July 25). NuScale Power (NYSE:SMR) Hits New 1-Year High – Time to Buy? https://www.marketbeat.com/instant-alerts/nuscale-power-nysesmr-hits-new-1-year-high-time-to-buy-2025-07-25/
4 NuScale Power. (2025). Quarterly Results. https://www.nuscalepower.com/investors/quarterly-results
