It has been a tough year for NuScale Power (NYSE: SMR) investors. Over the first six months of 2026, shares of the nuclear energy developer fell from $15 to $10. Then, over the subsequent months, NuScale’s stock price continued to sink lower. Today, shares hover just above $5.
And yet the long-term picture for NuScale remains bright. The company’s market capitalization is now well below $3 billion, yet it is pursuing a multi-trillion-dollar opportunity. There are plenty of reasons to believe NuScale stock has big upside potential.
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But are the risks worth an investment? To answer this question, investors should understand two key moving parts.
1. AI sentiment will continue to drive NuScale’s stock price
Nuclear power generation capacity in the U.S. has essentially been flat since the late 1980s. Domestic electricity demand generally showed little to no growth from 2005 to 2020. High costs, social backlash, regulatory hurdles, long construction times, and minimal growth in electricity demand have long deterred utilities from developing additional nuclear power facilities. The energy-hungry AI industry, however, is quickly changing that dynamic.
“The U.S. electrical grid needs to add the equivalent of more than 20 New York Cities by the early 2030s,” research from JPMorgan Chase concludes. “That’s how much demand for power is expected to outstrip supply in the coming years — mostly due to AI data centers, whose power needs are skyrocketing far beyond existing electrical capacity, and projections for AI power needs are being revised ever higher.”
NuScale’s small modular reactors (SMRs) can deliver low-carbon power more quickly and at a lower up-front cost than conventional nuclear power plants. That’s why SMRs are receiving newfound attention, despite the idea being many decades old.
That attention helped NuScale go public through a reverse merger in 2022 at roughly $10 per share. By 2025, enthusiasm for artificial intelligence (AI) reached a fever pitch. More data center construction meant more potential business for NuScale, fueling its stock price above $50.
In recent weeks, however, confidence in a massive, capital-intensive AI data center build-out has waned. Bloomberg reports that AI enthusiasm is “collapsing,” with signs that sentiment may continue to slide. If this trend continues, expect NuScale’s stock price to suffer.
2. Real-world project catalysts create upside opportunity
NuScale’s stock price weakness has largely reflected challenging macro factors. Another challenge has been a lack of company-specific catalysts. The biggest potential catalyst is news regarding a power purchase agreement (PPA) for its biggest SMR project with ENTRA1 and the Tennessee Valley Authority. This planned 6-gigawatt system would be the largest in the world. But key partners have yet to commit financially by signing a long-term PPA.
In February, NuScale’s management team noted that the PPA drafting process had begun. In August, CEO John Hopkins confirmed that he is communicating with ENTRA1 — NuScale’s financing partner — daily about a PPA. But we have yet to receive any word on whether a signed PPA is on the horizon.
NuScale’s third-quarter earnings call is scheduled for Thursday, Nov. 5. If there is any positive news regarding a potential PPA, NuScale shares could respond sharply. Beyond the upcoming earnings call, however, a finalized PPA might be the only positive potential catalyst for NuScale if AI enthusiasm — and thus enthusiasm regarding long-term SMR adoption — continues to wane.
“Since mid-October, the AI trade has gone from market engine to market problem,” research from Barclays warns. “The AI build-out increasingly relies on outside capital, and the signals from capital markets have turned less friendly.”
To be clear, demand for AI technologies continues to surge. What’s now in question is how fast and aggressive the data center build-out will be. A more controlled build-out allows AI companies to develop more conventional forms of energy generation, including natural gas, wind, and solar. NuScale’s SMR technology is most attractive in an environment where AI companies are willing to pay a premium for power to come online quickly.
As AI companies face funding constraints, sentiment surrounding NuScale could drop further, barring any company-specific catalysts.
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JPMorgan Chase is an advertising partner of Motley Fool Money. Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool has a disclosure policy.
