From Yahoo Finance · · 3m
Nuclear stock faces 40% downside warning from UBS
Wall Street questions whether NuScale Power can deliver on its small modular reactor promise before cash runs out.
In brief
Wall Street questions whether NuScale Power can deliver on its small modular reactor promise before cash runs out. NuScale has regulatory approval and funding, but faces skepticism about execution speed compared to competitors already building reactors. Originally reported by Yahoo Finance.
AI boom strains the power grid
Data centers and artificial intelligence are putting new pressure on the U.S. power grid, making nuclear energy a closely watched investment theme on Wall Street.
Government backs small reactors
In March 2025, the Energy Department requested $900 million to help develop American-made Generation III+ small modular reactors to meet rising electricity demand.
Massive market opportunity ahead
The Energy Department predicts the U.S. may need as much as 200 gigawatts of new nuclear capacity by 2050 to fulfill rising energy demand from AI and industrial growth.
NuScale Power faces downgrade
UBS downgraded NuScale Power to Sell from Neutral and cut its price target to $6 from $10, implying roughly 40% downside from the stock's level when the call was issued.
The execution problem
Competitors are moving into construction, but NuScale has an expected build time of more than five years and no concrete client commitments, UBS said.
Projected cash burn is severe
UBS forecasts just one NuScale project breaks ground in 2028 and sees a cumulative cash burn of $700 million from 2026 through 2028.
NRC approves reactor design
NuScale's US460 standard plant design received approval from the U.S. Nuclear Regulatory Commission in May 2025, with six modules each generating 77 megawatts of power.
Regulatory approval ahead of schedule
The NRC finished its review in 22 months, two months ahead of schedule, giving NuScale a distinctive regulatory position among competitors.
NuScale has substantial cash reserves
As of June 30, 2026, NuScale reported $1.89 billion in total cash, short-term investments, and investments, with no debt.
But cash burn is accelerating
NuScale spent $372.9 million in operating cash during the first six months of 2026, compared with $56.1 million for the same period in 2025.
Company has never been profitable
NuScale has lost money since its founding and recorded a cumulative deficit of $824.4 million as of June 30, 2026.
Romania project shows progress
On February 12, 2026, Romanian shareholders approved the final investment decision for the Doicești small modular reactor project, a significant milestone for NuScale.
TVA partnership offers huge potential
TVA and NuScale announced support for plans to install up to 6 gigawatts of NuScale small modular reactor capacity throughout TVA's seven-state area.
Competitors are moving faster
TVA filed the final part of its building permit application for a BWRX-300 small modular reactor at Clinch River in Tennessee in May 2025, showing competitors advancing.
Timing could make or break it
A five-year delay in deployment could require more than 20 gigawatts per year of construction and raise capital needs by as much as 50%, the Energy Department warned.
Two competing investment theses
NuScale has regulatory approval, $1.89 billion in cash, and major partnerships. But UBS questions whether it can convert plans into construction fast enough to justify its value.
In short
NuScale has regulatory approval and funding, but faces skepticism about execution speed compared to competitors already building reactors.
