Prediction: This Is What Comes Next for Nuclear Energy Stocks Like NuScale Power Corporation

Core Insights - NuScale Power Corporation has seen a significant stock increase of 162% over the past year, attributed to a growing interest in nuclear energy and supportive government policies [1][3] - The U.S. government aims to increase nuclear power generation from 100 gigawatts to over 400 gigawatts by 2050, which could require substantial investments in new facilities [3][4] - Despite the positive market sentiment, NuScale has yet to secure customers for its small modular reactors, raising concerns about its future profitability [6][9] Company Overview - NuScale Power has a market capitalization exceeding $10 billion and is the only company with a small modular reactor design approved by the Nuclear Regulatory Commission (NRC) [1][4] - The company has received $600 million in funding from the Department of Energy but struggles to make its products economically viable compared to other energy sources [7][8] - Currently, NuScale generates only $49 million in annual revenue, primarily from project studies and grants, indicating it is pre-revenue until it secures customer orders [9] Market Position and Challenges - The company faces significant challenges in executing its technology claims, with no current customers for its modular reactors and previous projects canceled due to lack of demand and cost overruns [6][8] - NuScale's cash burn rate is $98 million per year, which has been mitigated by internal cost cuts, but this may hinder development progress [9] - The stock is trading at a high valuation with a price-to-sales ratio of 77, which is considered expensive given the capital-intensive nature of the nuclear energy sector [13] Future Outlook - Predictions indicate that NuScale Power stock may struggle in the coming years, with potential negative share-price performance that could disappoint investors [12][14] - The company is years away from completing any projects, and even if it secures a customer, the timeline for project completion will prolong cash losses [12]