NuScale Power Corporation (SMR): A Bull Case Theory

We came across a bullish thesis on NuScale Power Corporation on Rittik’s Substack by Anand Capital. In this article, we will summarize the bulls’ thesis on SMR. NuScale Power Corporation's share was trading at $35.90 as of August 25^th.

NuScale Power Corporation represents a speculative yet compelling investment opportunity as a first mover in Small Modular Reactor (SMR) technology, holding the only NRC-approved SMR design to date. The company’s modular and scalable approach positions it to address diverse global energy needs, ranging from electricity generation to industrial applications like hydrogen production and desalination.

Backed by Fluor Corporation, NuScale benefits from both financial stability and engineering expertise, supporting its credibility in the highly regulated nuclear sector. Its competitive advantages include regulatory approval, scalability, and conventional light water reactor technology, which allows for faster commercialization relative to advanced nuclear peers such as TerraPower, X-energy, and Rolls-Royce.

NuScale is well-positioned to benefit from accelerating global decarbonization efforts, energy security concerns, and growing demand for reliable baseload power, with potential expansion opportunities across Europe, Asia, and other markets. Recent financial performance underscores its growth trajectory, with revenue climbing from $0.4 million in 2019 to $49 million LTM, alongside significant gross margin recovery to nearly 80%.

However, the company remains pre-commercial, recording substantial operating losses and heavy R&D spend, while maintaining a strong cash position of over $500 million to support ongoing development. Execution risks remain material, with potential delays, cost overruns, and political or regulatory headwinds, alongside intensifying competition from alternative clean energy technologies.

Despite these challenges, NuScale offers asymmetric upside in a best-case scenario where commercialization accelerates into the next decade, potentially driving a rerating of the stock. With a speculative buy rating, the investment case hinges on a long-term horizon, disciplined position sizing, and close monitoring of regulatory milestones.

Previously we covered a bullish thesis on NANO Nuclear Energy Inc. (NNE) by Charly AI in May 2024, which highlighted its vertically integrated platform in the advanced nuclear sector with proprietary microreactor models and in-house fuel capabilities. The company’s stock price has appreciated approximately by 18.83% since our coverage. This is because investor confidence remains strong. Anand Capital shares a similar view on NuScale Power but emphasizes its NRC-approved SMR leadership.

NuScale Power Corporation is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 18 hedge fund portfolios held SMR at the end of the first quarter which was 24 in the previous quarter. While we acknowledge the potential of SMR as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.