Should You Buy, Sell or Hold NuScale Power Stock at Its P/S of 163.9X?

Core Viewpoint - NuScale Power (SMR) shares are currently overvalued, indicated by a Value Score of F, with a forward 12-month price/sales (P/S) ratio of 163.9X, significantly higher than its median of 14.24X and the Zacks Computer and Technology sector's 6.57X [1][5][18] Group 1: Performance Metrics - NuScale Power shares have surged 837.1% over the trailing 12-month period, outperforming the Zacks Computer & Technology sector's gain of 22.2% and the Zacks Electronics-Power Generation industry's rise of 422.9% [4] - The Zacks Consensus Estimate for SMR's loss in 2025 is pegged at 45 cents per share, which has widened by 10 cents over the past 30 days, compared to earnings of 73 cents per share in the year-ago quarter [15] Group 2: Market Demand and Growth Drivers - The strong performance of NuScale can be attributed to high demand for electricity and clean energy, particularly from AI-powered data centers, which require reliable and carbon-free energy [5][6] - Data center power consumption in the U.S. is projected to rise from 25 gigawatts in 2024 to over 80 gigawatts by 2030, presenting a significant opportunity for NuScale's Small Modular Reactor (SMR) technology [7] Group 3: Strategic Developments - NuScale opened its Energy Exploration Center at The Ohio State University in December 2024 to develop the next generation of nuclear professionals, emphasizing the need for skilled workers in the nuclear energy sector [8] - The company is gaining traction in international markets, with significant partnerships, including a collaboration with the Government of Ghana for an SMR plant [11] Group 4: Industry Partnerships - Major technology companies like Amazon, Microsoft, Alphabet, and Oracle are making substantial commitments to using nuclear energy, including SMRs, to meet sustainability goals, positively impacting NuScale's market positioning [12][13] - As these organizations align their energy strategies with sustainable nuclear options, the demand for SMRs continues to gain momentum, positioning NuScale at the forefront of this emerging energy market [14] Group 5: Challenges and Financial Outlook - Despite advancements in SMR technology and growing partnerships, NuScale faces challenges in a competitive energy market, including the presence of renewable energy sources and regulatory hurdles [17] - The delayed commercialization of its SMR technology, high operating expenses, and reliance on long-term projects hinder financial stability, with a stretched valuation being a concern [18]