NuScale Power Plunges 8.3%—What’s Fueling the Selloff Amid Regulatory Wins?

Summary
• NuScale Power (SMR) slumps 8.33% intraday to $40.96, a sharp reversal from its $44.69 high
• Q2 revenue of $8.1M misses estimates by 30%, while losses widened to $0.13/share
• NRC design approval for 77MWe reactor and $489.9M cash reserves highlight long-term potential

NuScale Power’s stock is in freefall despite a regulatory milestone, as investors punish the company for missing earnings estimates and escalating costs. The stock’s 8.3% drop has pushed it closer to its 52-week low of $6.88, raising questions about the sustainability of its cash runway and commercialization timeline. With the sector leader GE up 0.9%, the divergence underscores SMR’s unique challenges.

Earnings Miss and Cost Overruns Overshadow NRC Win
NuScale’s selloff stems from a stark disconnect between its regulatory progress and financial performance. While the company celebrated early U.S. Nuclear Regulatory Commission approval for its 77MWe reactor design—a key differentiator in the SMR race—its Q2 results revealed a 30% revenue miss and a 33.9% year-over-year surge in G&A expenses. The $8.1M revenue, though up 710% from 2024, fell short of $11.65M estimates, signaling unmet commercial expectations. Investors are now recalibrating for a prolonged transition phase, with cash burn rates outpacing revenue growth.

Heavy Electrical Equipment Sector Mixed as GE Gains
Bearish Setup: Short-Dated Puts and SMU ETF Playbook
• 200-day average: 25.47 (well above current price)
• RSI: 40.13 (oversold territory)
• MACD: 1.87 (bearish crossover with signal line at 2.77)
• Bollinger Bands: Price at $40.96, near lower band at $39.16

The technicals paint a bearish near-term picture, with SMR trading below its 30D MA at $43.23 and RSI signaling oversold conditions. The Tradr 2X Long SMR Daily ETF (SMU) has plummeted 16.29%, amplifying the selloff’s momentum. For options, two contracts stand out:

• SMR20250815P40
- Type: Put
- Strike: $40
- Expiry: 2025-08-15
- IV: 98.11% (high volatility)
- Delta: -0.408 (moderate sensitivity)
- Theta: -0.0459 (moderate time decay)
- Gamma: 0.0653 (responsive to price swings)
- Turnover: 79,370 (liquid)
- Payoff at 5% downside: $0.96 (max(0, 40 - 40.960.95))
- This put offers a 21.53% leverage ratio and 15.2% price change potential, ideal for a short-term bearish bet.

• SMR20250815P41
- Type: Put
- Strike: $41
- Expiry: 2025-08-15
- IV: 94.44% (high volatility)
- Delta: -0.476 (strong sensitivity)
- Theta: -0.0272 (low time decay)
- Gamma: 0.0696 (high responsiveness)
- Turnover: 8,869 (liquid)
- Payoff at 5% downside: $1.85 (max(0, 41 - 40.960.95))
- This contract’s 17.71% leverage ratio and 11.85% price change potential make it a high-gamma, low-theta play for aggressive short-term bearish moves.

If $40.50 breaks, SMR20250815P40 offers a high-gamma, high-IV short-side play. Aggressive bulls may consider SMR20250815C42.5 into a bounce above $44.37.

Backtest NuScale Power Stock Performance
The SMR strategy has demonstrated resilience following a significant intraday plunge of -8%. The backtest data reveals a 3-day win rate of 53.70%, a 10-day win rate of 55.28%, and a 30-day win rate of 55.12%. These rates indicate that the strategy tends to recover from such events, with the maximum return during the backtest period being 30.55% over 30 days, suggesting that the strategy can generate positive returns in the medium to long term after experiencing a substantial downturn.

Short-Term Bearish Bias: Watch $40.20 Support and $44.37 Resistance
NuScale’s selloff reflects a market prioritizing near-term financial discipline over long-term regulatory momentum. While the $489.9M cash reserves suggest runway, the 8.3% drop highlights investor skepticism about cost overruns and delayed commercialization. Key levels to watch: a breakdown below $40.20 (intraday low) could trigger a test of the 52-week low at $6.88, while a rebound above $44.37 (30D support) may rekindle NRC-driven optimism. Sector leader GE is up 0.9%, offering a contrast to SMR’s struggles. Aggressive traders should focus on short-dated puts and SMU ETF exposure, but brace for volatility until the RoPower project’s final investment decision in late 2025.