NuScale Power’s Stock Surge Faces Fundamental Headwinds

Shares of NuScale Power have opened the year with significant momentum, propelled by growing political and industry support for its small modular reactor (SMR) technology. However, this rally unfolds against a backdrop of substantial financial losses and shareholder dilution, creating a complex investment thesis.

A primary catalyst for the share price advance is a clear shift in U.S. energy policy favoring nuclear innovation. Recent congressional hearings by the House Energy Subcommittee have focused on accelerating regulatory approvals for advanced reactors. This aligns with the official launch of a "Nuclear Renaissance" initiative, which sets specific deployment targets for 2028. Furthermore, a federal commitment of $2.7 billion to bolster domestic uranium supply has bolstered sector sentiment.

Regulatory progress provides a concrete foundation. The Nuclear Regulatory Commission has granted approval for NuScale's upgraded 77‑MWe reactor design, a critical step enabling larger-scale project deployments. The technology is also gaining traction with major utility companies. Duke Energy identified NuScale's SMRs as a preferred option for a potential site in North Carolina in a recent regulatory filing. Meanwhile, the Tennessee Valley Authority (TVA) is nearing the finalization of substantial power contracts totaling 6 gigawatts. This combination of legislative, regulatory, and commercial support explains the heightened trading activity and demand observed in early-year sessions.

The stock is currently trading at $19.67, marking a year-to-date increase of approximately 20.6%.

Financial Realities and Shareholder Dilution Temper Optimism

Despite the positive momentum, significant structural challenges persist. The company recently secured approval to increase its authorized Class A shares from 332 million to 662 million—a move that effectively doubles the potential share count and raises concerns over equity dilution for existing investors.

Should investors sell immediately? Or is it worth buying Nuscale Power?

Operationally, NuScale continues to report steep losses. For the third quarter of 2025, the company posted a net loss of $532.65 million. This contrasts sharply with quarterly revenue of just $8.24 million and a nine-month revenue total of $28.4 million. The firm's operational cash flow deficit, nearing $200 million, underscores its ongoing reliance on external capital to fund development and larger projects.

A key valuation anchor remains a major $25 billion agreement with ENTRA1. Market pricing appears to be increasingly factoring in potential future deployments and this contract's value, rather than the current weak cash flow generation. Consequently, the equity remains highly sensitive to news flow regarding financing rounds, final contract signings, or further capital-raising activities.

Market Volatility and the Path Forward

The stock has exhibited pronounced volatility accompanied by high trading volumes. Analysis from market researchers has resulted in price targets clustering around $24, suggesting the current valuation already incorporates expectations for future project installations. In the near term, the share price trajectory will likely be dictated by the tangible implementation of the government's nuclear policy agenda and the progression of key utility contracts.

Specifically, the ongoing House Energy Subcommittee hearings and the pending contract finalizations with TVA and Duke Energy will be pivotal watchpoints in the coming weeks and months. Successful execution of funding plans and the securing of firm financing for projects could sustain upward momentum. Conversely, any stumbles in these processes or delays in regulatory approvals would shift investor focus back to the pressing risks of dilution and the company's substantial cash burn.