SMR Stock Earnings Preview: Can NuScale Leverage AI Demand?

Introduction

NuScale Power Corporation [SMR] focuses on providing proprietary and innovative small modular reactor (SMR) technology to deliver carbon-free nuclear power.

Due to announce Q1 2025 earnings on May 12, investors will likely be hoping for news that will spark a significant turnaround in the stock’s performance.

A Turndown for the Books

2024 saw SMR stock rocket 445%, but this year the firm has struggled with losses and uncertainty surrounding energy demand.

Despite the opening of new power energy exploration centers at the Rensselaer Polytechnic Institute and the University of Nevada — a move aiming to build NuScale’s position as a leader in SMR nuclear technology — SMR stock remains down 7.36% in the year to date.

This significantly underperforms the nuclear sector, as tracked by the VanEck Uranium and Nuclear ETF [NLR], which is up 2.96% year-to-date. Perhaps more concerning, it also trails the S&P 500, which is down 4.26% since the start of the year.

Now, some of this dip can be attributed to its overvaluation at the end of last year, which was driven by hype around the energy stocks tipped to power the artificial intelligence (AI) revolution.

The emergence of DeepSeek in late January — with the Chinese platform claiming that it required 95% less power than other AI models — undermined this enthusiasm.

Q4 2024 results also left investors underwhelmed, with net losses of $180.3m almost doubling analyst estimates.

What Might Q1 2025 Hold for SMR?

Analysts are expecting moves in a positive direction for NuScale in 2025 and beyond, although it remains to be seen whether any material improvements will be seen as soon as Q1.

Revenue for the FY 2025 is pinned at $74m, which would represent a more than 100% increase from 2024 levels. Perhaps more importantly, losses are expected to dip to $84m for the full year.

Any significant movement in the right direction is contingent on several assumptions. Chief amongst these is that its new 77MW design will be approved by the US Nuclear Regulatory Commission, and that tech giants like Amazon [AMZN], Meta [META] and Microsoft [MSFT] will invest heavily in SMR power.

Neither of these are guaranteed, with the Trump administration potentially favoring coal power as it cuts climate protection schemes, and the potential for more efficient technologies to reduce energy needs.

Energy Alternatives

Elsewhere in the energy sector, the story is much the same. Both Bloom Energy [BE] and Power Solutions International [PSIX] are down in the year to date, struggling to recover from the DeepSeek drama in January.

Source: Seeking Alpha

That said, strong Q4 and FY 2024 earnings from PSIX in March saw some analysts upgrade the stock. Of the seven tracking PSIX stock on Seeking Alpha, two rank it a ‘strong buy’ and three a ‘buy’, with two ‘holds’.

For Bloom, positively surprising results did not translate into investor confidence at the beginning of May. CFO Daniel Berenbaum’s abrupt departure, following just one year in the job, was another cause for jumpiness. It appears the firm will have to do more than simply exceed revenue estimates in order to see any kind of outperformance on the exchange.

SMR Stock: The Investment Case

Despite the downturn so far this year, SMR remains up 184.91% for the past 12 months. As investors look to the future, here are some factors to consider.

The Bull Case for NuScale

While the immediate picture might look far from bright, there are several reasons to be optimistic about SMR in the longer term.

Despite wider market turbulence, Wall Street continues to back SMR’s chances.

Of the ten analysts tracking the stock on Yahoo Finance, one ranks it a ‘strong buy’ and six a ‘buy’. Two analysts suggest the stock is a ‘hold’, with the final analyst suggesting SMR is an ‘underperform’ as it stands.

Those who follow Ken Griffin’s investments will also be interested to hear he added 981,000 shares to his existing SMR stake in Q4 2024.

Whether the energy-intensive AI boom progresses as was expected at the end of 2024, the general move towards carbon-neutral energy is a fairly consistent project over the long term.

Despite a US administration denying the long-term impacts of climate change and defunding net zero projects, the international picture remains positive for NuScale and its competitors.

The Bear Case for NuScale

As ever, though, there are plenty of reasons for concern when considering SMR, particularly as a potential growth play.

NuScale is making good progress towards cutting its losses, but the fact remains that it will take years — and some good luck to boot — to become profitable.

Various projects in the works, including its revolutionary 77MW design, cannot be successful without a regulatory green light, and the road to commercialization following approval is a long one.

Conclusion

NuScale Power has some exciting potential, but the returns for investors might feel quite far away. Any concrete progress in regulatory approval and product pipelines could partially allay concerns.