NuScale Power (SMR) Stocks Surge amid Clean Energy Demand

NuScale Power (SMR) shares surged 76.3% in the past year, driven by high demand for clean energy and AI-powered data centers. As interest from tech giants grows, the company's market positioning appears promising despite some valuation concerns.

Date: 18-03-2025

AI Rating: 6

Performance Overview: NuScale Power has recorded a remarkable 76.3% increase in its stock price over the last 12 months, significantly outperforming both the Computer & Technology sector (up 8.1%) and the Electronics-Power Generation industry (up 60.4%). This performance is primarily due to the rising demand for clean energy solutions and the expansion of AI-powered data centers.

Revenue Growth: The company reported substantial revenue growth, with fourth-quarter 2024 revenues climbing to $34.2 million from $4.6 million in the same quarter of the previous year. This nearly eightfold increase is largely due to developments related to the RoPower project in Romania, indicating strong commercial engagement and growth potential.

Market Positioning: NuScale Power is well-positioned as interest in small modular reactor (SMR) technology grows among tech companies including Microsoft, Meta Platforms, Alphabet, and Oracle. These corporations are making significant commitments to nuclear energy, which bodes well for NuScale Power as these partnerships could solidify demand and contribute to future revenue.

Earnings Per Share (EPS): However, for 2025, the Zacks Consensus Estimate for loss is projected at 41 cents per share, a narrowing of 5 cents over the last month. This reflects cautious optimism, as the previous year had positive earnings of 42 cents per share.

Valuation Concerns: The stock is perceived as overvalued, trading at a forward price/sales ratio of 65.82X compared to its median of 18.31X and the sector's 5.80X. This could present risks for investors considering entry points.

Conclusion: While NuScale Power is capturing attention with its innovation in the sustainable energy sector and forming strategic partnerships, its high valuation and market competition could pose challenges. The recommendation is currently a 'Hold' as analysts suggest waiting for a better entry point to invest in shares of SMR.

Stocks: SMR META MSFT GOOGL