NuScale Power: A High-Risk, High-Reward Bet in the SMR Revolution

The small modular reactor (SMR) sector has long been a realm of promise and peril, and NuScale Power stands at its epicenter. For contrarian investors willing to tolerate extreme volatility and regulatory uncertainty, the company's recent progress-and market pessimism-raises a compelling question: Is NuScale's current valuation a mispricing of its long-term potential, or a warning sign of deeper structural risks?

Regulatory Breakthroughs: A Foundation for Credibility

NuScale's May 2025 Standard Design Approval (SDA) for its 77 MWe SMR design marks a critical milestone according to the company. This second NRC certification-following the 2023 approval for the 50 MWe variant-positions NuScale as the only SMR developer with dual regulatory clearances in the U.S. The uprated design retains passive safety features while enhancing scalability, enabling a broader range of applications, from industrial energy to AI data centers. According to the NRC's final safety evaluation report, the approval was issued ahead of schedule, underscoring the agency's confidence in NuScale's technology.

This regulatory momentum is not merely procedural. It provides a foundation for commercialization, as the SDA allows NuScale's design to be referenced in construction permits and manufacturing licenses. For investors, this represents a narrowing of one of the sector's most significant risks: the protracted and costly approval process that has derailed many SMR ventures.

Strategic Partnerships: Scaling the SMR Vision

NuScale's collaboration with ENTRA1 Energy and the Tennessee Valley Authority (TVA) is arguably its most transformative development. The 6 GW deployment program-announced in late 2025-represents the largest SMR project in U.S. history. By financing, building, and operating six 12-module plants (each generating 924 MWe), ENTRA1 aims to supply TVA with clean, reliable power by 2030. According to NuScale's press release, this partnership is not just a technical achievement but a strategic one: it aligns NuScale's technology with the energy demands of high-growth sectors like AI and semiconductors, which require stable, low-cost baseload power.

The financial implications are equally significant. A $128.5 million milestone payment in Q3 2025 underscores the project's progress. Yet, as one analyst notes, the first plant's 2030 timeline hinges on site selection and a binding power purchase agreement-a reminder that execution risks remain substantial.

The Romanian Gambit: A Long-Term Bet with Global Implications

NuScale's RoPower Doicești project in Romania adds another layer of complexity. While the final investment decision has been delayed due to ownership changes among local partners, the project remains active, supported by a $98 million loan from the U.S. Exim Bank and interest from Japan, South Korea, and the UAE. According to World Nuclear News, the 462 MWe plant, powered by six 77 MWe modules, could serve as a blueprint for international SMR deployments, particularly in energy-starved emerging markets.

However, the project's timeline has slipped to 2026, and its €4.9 billion budget highlights the capital intensity of SMR commercialization. For investors, this underscores a paradox: NuScale's long-term potential is tied to projects that are inherently capital-intensive and subject to geopolitical and regulatory shifts.

Financial Risks: A Volatile Balance Sheet

NuScale's financials tell a story of optimism and fragility. As of Q3 2025, the company held $753.8 million in cash but reported a $1.85-per-share loss, a sharp increase from $0.18 in 2024. Revenue of $8.2 million missed expectations, and analysts from BNP Paribas and Citigroup have downgraded the stock, citing concerns over ENTRA1's ability to deliver on its promises. According to SolarVision, the cash burn rate is another red flag. A discounted cash flow analysis suggests NuScale is overvalued by 384.7%, with free cash flow expected to remain negative until 2029. While the company continues to raise capital via at-the-market programs, this strategy risks diluting existing shareholders-a concern for any long-term investor.

Stock Volatility: A Double-Edged Sword

NuScale's stock has been a rollercoaster. A 31% drop in August 2025 was followed by a 9.47% decline in November, reflecting investor anxiety over regulatory delays and financial performance. Yet volatility is inherent to the SMR sector, where outcomes are binary: either a company becomes a cornerstone of the energy transition or it collapses under the weight of costs and delays.

For contrarian investors, the question is whether the current pessimism is overblown. NuScale's $11.5 billion market cap-despite no revenue and a 2030 revenue horizon-suggests the market is pricing in a worst-case scenario. If the TVA and RoPower projects proceed as planned, this could represent a significant discount to intrinsic value.

Conclusion: A Contrarian's Dilemma

NuScale Power is a quintessential high-risk, high-reward investment. Its regulatory progress and strategic partnerships validate its technological leadership, while its financials and stock volatility expose the sector's inherent challenges. For aggressive, long-term investors, the current market pessimism may present an opportunity-if they are prepared to endure years of uncertainty and potential dilution.

The key lies in NuScale's ability to execute. If the TVA and RoPower projects deliver on their promises, the company could become a linchpin of the global energy transition. If not, it may join the ranks of SMR casualties. In a world increasingly desperate for carbon-free energy, the stakes could not be higher.