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Nuclear Energy Gains Momentum with Major Pledge from Tech Giants

Nuclear energy is poised for growth as tech giants like Amazon and Alphabet join 31 countries pledging to triple capacity by 2050. With NuScale Power leading in small modular reactors, investors may see a shift, but long-term deployment remains a challenge.

Date: 
AI Rating:   5
Nuclear Energy Resurgence
Nuclear energy has garnered renewed interest, with over 31 countries committing to tripling their nuclear capacity by 2050. High-profile tech companies, including Amazon, Alphabet, and Meta Platforms, have also pledged support, indicating a growing recognition of nuclear power's potential role in meeting energy demands alongside renewable sources.

NuScale Power's Position
NuScale Power (NYSE: SMR) stands out as the first company to receive design approval from the Nuclear Regulatory Commission (NRC) for its small modular reactor (SMR). This achievement positions NuScale potentially with a first-mover advantage in a market expediting toward nuclear solutions. The company is also in discussions with significant players in technology and government sectors, which may enhance its prospects.

Challenges Ahead
Despite being at the forefront, NuScale faces significant hurdles. Its initial reactor design has been approved, but a larger reactor version essential for cost-effectiveness still awaits NRC approval, expected by mid-2025. The time required for the technology to be commercialized remains a critical factor, and it could be several years before any tangible deployment occurs. Furthermore, the company has seen cost overruns in past projects significantly impact investor confidence. An example includes the termination of a project by the Utah Associated Municipal Power System due to escalating costs that far surpassed initial estimates, rising from $3 billion to $9.3 billion.

Investor Sentiment and Speculation
NuScale Power remains a speculative stock, experiencing price fluctuations between $3.79 and $32.30 over the past year. While the optimism surrounding nuclear energy is evident, investors should remain vigilant, as sentiment will heavily influence stock performance based on technological developments and regulatory approvals. As a story-driven stock, it seems more suited for aggressive investors willing to engage in a high-risk investment strategy with a long-term horizon.
Stocks:  SMR