NuScale Power (SMR) Plunges 9.4% Amid Historic SMR Deal—Is This a Buying Opportunity or a Warning?

Summary
• NuScale Power (SMR) slumps to $36.602, erasing $4 from its $40.72 open
• Landmark 6-GW TVA-ENTRA1 Energy SMR deployment announced, yet shares trade near 52-week low
• Intraday range spans $36.30 to $41.06, signaling sharp short-term turbulence
• Sector peers like GE Vernova (GEV) rally 2.7% as nuclear energy gains traction

NuScale Power’s stock has plunged nearly 9.4% on Thursday, buckling under a mix of bullish headlines and bearish technicals. Despite a historic 6-GW SMR deployment agreement with TVA and ENTRA1 Energy, the stock has cratered from its $40.72 open to $36.602, trading near its 52-week low of $7.02. The move has sparked urgent questions: Is this a buying opportunity for long-term nuclear energy believers, or a warning sign of overvaluation amid regulatory and execution risks?

Landmark SMR Deal Sparks Skepticism Amid Execution Risks
NuScale Power’s 9.4% intraday drop defies the optimism of its landmark 6-GW TVA-ENTRA1 Energy SMR deployment. While the deal marks the largest U.S. SMR program in history, market participants are fixated on the company’s track record of delays and cost overruns. The cancellation of NuScale’s Carbon Free Power Project in 2024—due to insufficient customer subscriptions and design changes—has left a lingering cloud over its commercial viability. Additionally, the absence of public timelines or cost analyses for the TVA-ENTRA1 project has fueled skepticism about its feasibility. With NuScale’s Dynamic PE at -164.78 and no revenue yet, investors are recalibrating expectations amid regulatory hurdles and the high capital intensity of nuclear projects.

Specialty Industrial Machinery Sector Mixed as GE Vernova Leads
The Specialty Industrial Machinery sector is in a precarious position as NuScale’s plunge mirrors broader industry challenges. While GE Vernova (GEV) rallies 2.7% on Thursday, reflecting renewed confidence in nuclear infrastructure, NuScale’s struggles highlight sector fragmentation. The nuclear energy segment faces mixed signals as North Dakota and Poland explore advanced nuclear projects to meet AI and data center demand. However, the Global Nuclear Power Tracker underscores a stark reality: nuclear lags behind renewables in new capacity and generation. Wind and solar projects in Europe alone outpace nuclear by a 14:1 ratio, with 600 GW of renewables in development versus 43 GW for nuclear. This context amplifies NuScale’s risks, as investors weigh the sector’s ability to compete with faster, cheaper alternatives.

Capitalizing on NuScale’s Volatility with Gamma-Driven Puts and Calls
• 200-day MA: $26.90 (well below current price)
• RSI: 58.48 (neutral, but trending lower)
• MACD: -1.28 (bearish crossover with signal line at -1.73)
• Bollinger Bands: Price at $36.602, near lower band ($30.19)
• Kline pattern: Short-term bullish trend, long-term bullish

NuScale’s technicals suggest a volatile short-term outlook amid a long-term bullish setup. Key levels to watch include the 30D support at $34.93 and 200D support at $16.51. The stock’s 10.6% turnover rate and 11.3M volume indicate moderate liquidity, but options traders should focus on high-gamma, high-IV contracts for directional bets. Two top options from the chain stand out:

• SMR20250912P36 (Put, $36 strike, 9/12 expiry):
- Implied Volatility: 87.76% (high)
- Delta: -0.3900 (moderate bearish exposure)
- Gamma: 0.0752 (high sensitivity to price swings)
- Theta: -0.0339 (moderate time decay)
- Turnover: $104,343 (liquid)
- LVR: 24.36% (moderate leverage)
- Payoff at 5% downside ($34.77): $1.23 per contract
- This put offers a balance of leverage and liquidity, ideal for a 5-7% downside scenario.

• SMR20250912C38.5 (Call, $38.5 strike, 9/12 expiry):
- Implied Volatility: 79.71% (high)
- Delta: 0.4043 (moderate bullish exposure)
- Gamma: 0.0836 (high sensitivity to price swings)
- Theta: -0.1640 (aggressive time decay)
- Turnover: $2,465,214 (liquid)
- LVR: 29.62% (high leverage)
- Payoff at 5% downside ($34.77): $0 (out of the money)
- This call is a high-risk, high-reward play for a rebound above $38.50.

Trading Insight: Aggressive bears should prioritize SMR20250912P36 for a 5-7% downside target, while bulls may consider SMR20250912C38.5 if NuScale breaks above $38.50. Given the stock’s proximity to its 52-week low, a breakdown below $34.93 could trigger a deeper sell-off.

Backtest NuScale Power Stock Performance

NuScale’s Volatility: A Buying Opportunity or a Warning Shot?
NuScale Power’s 9.4% plunge underscores the tension between its transformative SMR vision and execution risks. While the TVA-ENTRA1 deal is a historic milestone, the stock’s technicals and sector headwinds suggest caution. Investors should monitor the 30D support at $34.93 and 200D support at $16.51, with a focus on high-gamma options like SMR20250912P36 for directional bets. Meanwhile, sector leader GE Vernova (GEV) rallying 2.7% highlights broader nuclear optimism. For NuScale, the path forward hinges on regulatory progress and TVA-ENTRA1’s execution. Watch for a breakdown below $34.93 or a rebound above $38.50 to dictate next steps.