NuScale Power Shares Advance Amid U.S. Army Nuclear Reactor Initiative

Opening

NuScale Power (NYSE: SMR) shares recorded substantial gains following the U.S. Army's announcement of a new program aimed at deploying nuclear microreactors at military bases globally. The news has fueled investor speculation regarding potential partnerships between the government and NuScale, a leader in Small Modular Reactor (SMR) technology.

The Event in Detail

The U.S. Army introduced the Janus Program, a strategic initiative designed to integrate commercially owned and operated nuclear microreactors into military installations worldwide. This program, announced at the Association of the U.S. Army (AUSA) conference in Washington, aims to provide resilient and reliable power solutions for defense operations. Army Secretary Dan Driscoll and Energy Secretary Chris Wright highlighted the program's objective to establish reactors capable of producing "multiple megawatts of power," designed to operate for "years, potentially decades, without any refueling or any reservicing." The initiative aligns with executive mandates to have operational reactors at military bases by September 2028, with plans to select nine bases for an initial phase and commercial suppliers in 2026.

NuScale Power is notably positioned for this program as its SMR technology was the first to receive design approval from the U.S. Nuclear Regulatory Commission (NRC), making it a suitable candidate for the Army's requirements for scalable and compact nuclear power solutions.

Analysis of Market Reaction

NuScale Power stock responded with a significant advance, surging over 22% in early trading before settling to approximately a 10% gain through the day. The stock (SMR) closed up 11.17% at $50.91 and has rallied over 25% this week, with an impressive 375% increase from its year-to-date low in April. This robust market reaction underscores investor optimism regarding NuScale's potential to secure high-profile government contracts. The Janus Program is perceived as creating a de-risked opportunity for SMR technology, providing policy momentum that could translate into substantial revenue streams for pioneering companies like NuScale.

Broader Context & Implications

The Janus Program reinforces the growing confidence in nuclear energy's pivotal role in national security and clean power generation, extending beyond traditional civilian applications. This development boosts investor sentiment across the broader Nuclear Energy Sector, particularly for firms engaged in SMR development, by offering a "real-world testing ground" for advanced reactor technologies.

From a financial perspective, NuScale Power currently commands a market capitalization of $6,815.84 million and a price-to-book (P/B) ratio of 9.83. Despite these figures, the stock's GF Value is assessed as "significantly overvalued" at $17.37, highlighting a disconnect between market price and intrinsic value estimates. The company, however, demonstrates strong financial health with an Altman Z-score of 35.43 and no debt, reflecting balance sheet strength. While its Profitability Grade is currently 'F', operating margins are expanding, signaling potential for future improvement. Revenue for Q2 2025 was reported at $8.1 million, with operating expenses at $44.9 million, and liquidity at $489.9 million as of June 30, 2025. The stock's price-to-sales (P/S) multiple stands at 346x, indicative of high market expectations for future growth.

However, the company's trajectory is not without challenges. The 2023 cancellation of the Carbon Free Power Project (CFPP) due to escalating costs serves as a cautionary tale. Furthermore, recent insider selling of 15,114,847 shares over the past three months suggests varying internal perspectives on the stock's immediate outlook.

Expert Commentary

Market analysts note that while the Janus Program provides a significant catalyst, NuScale still faces hurdles in converting potential interest into binding power purchase agreements. The timely finalization of customer contracts remains crucial for transforming project momentum into realized revenue and sustainable earnings. Projected revenue for NuScale is $402.3 million by 2028, requiring an ambitious 121.5% yearly growth. Fair value estimates from the Simply Wall St community vary widely, ranging from $0.87 to $41.69, underscoring diverse interpretations of the company's future prospects.

Looking Ahead

The focus for NuScale Power in the coming months will be on solidifying its position within the Janus Program and securing definitive contracts. Management has expressed confidence in achieving a firm U.S. contract by year-end 2025. The successful execution of these agreements will be paramount for validating its technology's commercial viability and justifying its current market valuation. Investors will closely monitor further announcements from the U.S. Department of Army regarding vendor selection and the progress of the initial microreactor deployments, as well as NuScale's ability to manage project costs and convert its technological leadership into tangible profitability.