Is NuScale Power (NYSE: SMR) a High-Risk Speculation or a Strategic Bet on the Nuclear Energy Renaissance?

The debate over NuScale Power's (NYSE: SMR) investment potential hinges on a critical question: Is it a speculative gamble on an unproven technology, or a calculated bet on the inevitable resurgence of nuclear energy as a cornerstone of decarbonization? As the first and only company to secure U.S. Nuclear Regulatory Commission (NRC) certification for its Small Modular Reactor (SMR) design, NuScale occupies a unique position in the energy transition. Yet its path to commercialization is fraught with financial, technical, and regulatory challenges. This analysis evaluates the balance between NuScale's long-term potential and its operational risks, drawing on recent developments in its financials, partnerships, and the broader nuclear energy landscape.

Financial Health and Funding: A Mixed Picture

NuScale's third-quarter 2025 results reveal a cash position of $753.8 million in cash and investments, bolstered by a $475.2 million fundraising through an at-the-market equity program. However, the company reported revenue of just $8.24 million and a loss of $1.85 per share, underscoring its reliance on capital infusions to sustain operations. A discounted cash flow (DCF) analysis suggests NuScale is currently overvalued due to its negative free cash flow, though projections indicate a potential turnaround by 2029. This timeline hinges on the successful execution of its commercialization strategy, which remains untested at scale.

Strategic Partnerships and Market Position

NuScale's partnership with ENTRA1 Energy and the Tennessee Valley Authority (TVA) represents a pivotal milestone. The trio's agreement to deploy up to 6 gigawatts of SMR capacity in the U.S. is the largest such program in history, targeting TVA's seven-state service area. ENTRA1 Energy, NuScale's exclusive global strategic partner, will handle development and financing, while TVA will purchase the generated electricity. This arrangement mitigates some of NuScale's commercialization risks by securing a long-term off-taker and developer. Additionally, NuScale's involvement in Romania's RoPower Doicești project and its $25 billion U.S.-Japan Framework Agreement highlight its international ambitions.

Regulatory and Technical Challenges

Despite NRC certification, NuScale faces lingering technical and economic hurdles. The termination of its Carbon Free Power Project (CFPP) in 2023 due to rising costs- pushing electricity price estimates from $55 to $89 per megawatt-hour-exposes the vulnerability of SMR economics to inflation and supply chain bottlenecks. A critical constraint is the limited availability of High-Assay Low-Enriched Uranium (HALEU), the fuel required for NuScale's reactors. Global HALEU production capacity remains insufficient to meet demand, creating a bottleneck for scaling deployment.