Is NuScale Power's (SMR) Skyrocketing Valuation Justified in the SMR Gold Rush?

NuScale Power (SMR) has surged 370% in the past year, with a market capitalization now exceeding $14.5 billion. This meteoric rise has positioned the small modular reactor (SMR) developer as a poster child for the nuclear renaissance, but whether its valuation justifies the hype remains a contentious question.

The SMR Market: A Gold Rush with Real Potential

The global SMR market, valued at $6.3 billion in 2024, is projected to grow at a 9.1% compound annual growth rate (CAGR), reaching $13.8 billion by 2032. This expansion is driven by energy security needs, decarbonization goals, and the rise of data centers and AI infrastructure, which demand reliable, zero-carbon power. NuScale, with its NRC-approved 77 MWe design, is uniquely positioned to capitalize on this trend. Unlike many competitors still navigating regulatory hurdles, NuScale's two certified designs (50 MWe and 77 MWe) give it a first-mover advantage in the U.S.

NuScale's Competitive Edge: Regulatory Wins and Strategic Projects

NuScale's July 2025 NRC approval for its uprated 77 MWe design is a critical milestone. This certification not only validates its technology but also accelerates its path to commercial deployment by 2030. The company's RoPower project in Romania—a potential 462 MWe SMR plant—could serve as a global reference case. With 12 modules already in production through its partnership with Doosan Enerbility, NuScale is demonstrating execution capability rarely seen in a pre-revenue company.

Moreover, NuScale's strategic partnerships, including its collaboration with ENTRA1 Energy and the Department of Energy's Pacific Northwest National Laboratory on hydrogen production, diversify its revenue streams. These initiatives align with the $8.37 billion global SMR market's demand for multifunctional energy solutions.

Financials: A Tale of Growth and Volatility

Despite the optimism, NuScale's fundamentals tell a mixed story. The company's P/E ratio of -37.72 (TTM) reflects ongoing losses, with a net loss of $75 million in Q2 2025. While its cash reserves ($521 million) and revenue growth (up 840% in Q1 2025 compared to Q1 2024) are encouraging, profitability remains elusive. Analysts project losses through 2027, raising concerns about its ability to sustain its valuation without near-term revenue.

Valuation Risks: Overhyped or Overdue?

NuScale's stock trades at a 492% premium to its estimated fair value, according to Morningstar, with a wide range of analyst price targets ($20–$46). The average $33.00 target implies a 35% downside from its current price of $51.85. This volatility stems from the high-risk, high-reward nature of SMR commercialization. While NuScale's regulatory progress and RoPower project could justify a premium, delays in securing firm orders or technical setbacks could trigger a re-rating.

Competitors like GE Hitachi (BWRX-300) and X-Energy (Xe-100) are closing the gap, with the latter securing a $500 million investment from Amazon's Climate Pledge Fund in October 2024. NuScale's lack of a near-term cash-flow-positive project makes it vulnerable to market shifts.

Investment Implications: A High-Stakes Bet

For risk-tolerant investors, NuScale represents a speculative bet on the SMR revolution. Its regulatory lead, cash runway, and RoPower project offer a path to long-term growth. However, the current valuation demands a successful execution of its commercialization plans, particularly securing the RoPower FID and scaling its technology in the U.S. data center market.

Conversely, value-oriented investors may find NuScale's metrics unattractive. With a P/E ratio far below peers like GE Aerospace (44.62) and a beta of 2.04 (indicating double the market's volatility), the stock is more suited for those with a high-risk appetite and a multi-year time horizon.

Conclusion: A Justified Hype?

NuScale Power's valuation is a double-edged sword. On one hand, its leadership in the SMR sector, regulatory milestones, and strategic projects position it to benefit from the $13.8 billion market by 2032. On the other, its unprofitability and reliance on future growth make it a speculative play. The RoPower project's success—or failure—will be the key determinant of whether NuScale's valuation is a justified leap of faith or a bubble waiting to burst.

For now, the market is betting on the former. Investors should monitor NuScale's August 7 earnings report and RoPower developments closely. A positive update could validate the hype; a miss may signal a correction. In the SMR gold rush, NuScale has the tools to strike it rich—but the mine is still unproven.