Can Rising Data Center Power Demand Drive SMR's Long-Term Growth?

NuScale Power SMR is benefiting from rising power demand from AI-driven data centers, which is becoming a major tailwind for the company. These Data centers need a lot of power every hour of the day, which is driving the demand for reliable and always-on power.

NuScale Power believes that its small modular reactors can support this type of demand as they provide a steady power supply. The company believes it has an advantage in behind-the-meter power, which can help large data center customers secure a dedicated electricity supply.

This trend directly supports NuScale Power’s commercial plans with ENTRA1 and the Tennessee Valley Authority (TVA). ENTRA1 announced an agreement with TVA to deploy up to 6 gigawatts (GW) of nuclear capacity using NuScale Power’s small modular technology. The program includes about 72 small modular reactor modules to be deployed across multiple sites in the United States. The first plant, which will use 12 modules, is targeted to begin delivering power around 2030.

Broader policy support, such as the U.S.-Japan framework, bodes well for the company's prospects. In the third quarter of 2025, NuScale Power stated that the white house has announced a U.S.-Japan framework to mobilize upto $550 billion in public and private investment. The goal here is to expand energy infrastructure and strengthen the supply chain. Per the agreement, NuScale Power and ENTRA1 were the only group named for power development for AI, where ENTRA1 could receive up to $25 billion in investment capital to develop baseload power plants. This could support the power demand required by data center customers.

The above-mentioned factors demonstrate that the data center demand remains strong. NuScale Power's long-term prospects depend on its ability to secure binding power purchase agreements and achieve steady project progress to turn this demand into long-term revenue growth.

NuScale Power Faces Stiff Competition

Despite NuScale Power’s advancements in small modular reactor technology, the company faces stiff competition in the nuclear energy industry from companies like Oklo OKLO and Constellation Energy CEG.

In January 2026, Oklo and Meta signed an agreement to support building a 1.2 GW nuclear power campus in Ohio, mainly to supply clean electricity for Meta’s data centers. Early site work starts in 2026, and the first phase could produce power by 2030. This shows how the buildouts for large-scale AI data centers are fueling the demand for clean energy.

In January 2026, Constellation Energy completed its acquisition of Calpine Corporation from Energy Capital Partners. The acquisition will enable Constellation Energy to provide reliable and cleaner electricity as U.S. power demand rises, fueled by the rapid growth in AI data centers.

NuScale Power’s Price Performance, Valuation & Estimates

Shares of NuScale Power have plunged 55.6% in the past six months compared with the Zacks Electronics - Power Generation industry’s decline of 52.4%.

NuScale Power 6 Month Price Return Performance

In terms of trailing 12-month Price/Book, NuScale Power shares are trading at 13.86X, higher than the industry’s average of 13.21X.

NuScale Power TTM 12M P/B Valuation

The Zacks Consensus Estimate for 2026 is pegged at a loss of 62 cents per share. The current estimate has narrowed from a loss of 67 cents per share projected 30 days ago.

NuScale Power currently carries a Zacks Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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