NuScale Power Shares Decline Following Major Shareholder Sale

NuScale Power Shares Decline Amid Significant Investor Sell-Off

U.S. equities saw varied performance this week, yet shares of NuScale Power (SMR) experienced a notable decline, dropping 18.8%. This movement contrasts with the broader market, where the S&P 500 and Nasdaq-100 registered more modest losses of 0.3% and 0.5% respectively. The primary catalyst for NuScale's downturn was a substantial share sale by Fluor Corporation, a long-term investor and one of NuScale's largest shareholders.

Fluor Monetizes Stake, Triggering Market Response

The decline in NuScale's stock followed the expiration of a 30-day lock-up period, enabling Fluor to sell a significant portion of its Class A common stock. Fluor had previously converted a substantial amount of its Class B shares into Class A shares in August 2025. Between September 19 and September 23, Fluor sold over 4.1 million common shares, totaling approximately $200 million, at prices ranging from $39.88 to $47.26. Further sales occurred between September 24 and September 26, involving 1,730,141 shares of Class A Common Stock for $90,051,262, at prices between $36.82 and $42.31. This influx of shares, totaling nearly $300 million in sales over a short period, has heightened investor concerns. Market participants now anticipate potentially hundreds of millions of dollars worth of additional sales by Fluor over the next two years, contributing to ongoing downward pressure on NuScale's stock price. Fluor still indirectly owns 5,562,897 shares after these transactions.

Valuation Scrutiny and Competitive Landscape Intensify

The market's reaction to Fluor's divestment is compounded by persistent scrutiny of NuScale's valuation. The company, which develops small modular reactors (SMRs), currently holds a market capitalization of approximately $5 billion, with some estimates placing it closer to $10 billion. This figure is considered substantial given that its core SMR technology remains largely unproven commercially and its revenue is modest. For the second quarter of 2025, NuScale reported revenue of $8.1 million, a rise from $1.0 million a year prior, alongside a net loss of $0.13 per share. Analysts project NuScale's 2025 revenue to reach $48 million, with narrowing annual net losses.

Valuation metrics also suggest potential overextension; NuScale's Price-to-Book (P/B) ratio stands at 7.34, significantly higher than the industry median of 2.37. GuruFocus labels the stock as "Significantly Overvalued," with a GF Value of $18.04 compared to a recent price of $38.

Adding to the competitive pressure, Goldman Sachs recently initiated coverage on NuScale's rival Oklo with a neutral rating. Oklo, despite having no current revenue and a market capitalization of over $19 billion, illustrates the speculative interest and intensifying competition within the nascent SMR market. Unlike NuScale, which holds U.S. Nuclear Regulatory Commission (NRC) Standard Design Approval for its SMR design, Oklo does not yet have NRC design approval. NuScale's business model emphasizes licensing its technology, aiming for lower capital demands compared to Oklo's own-and-operate approach.

Broader Market Context and Future Outlook

The nuclear energy sector is experiencing a "renaissance," driven by increasing demand from artificial intelligence infrastructure and global electrification efforts. NuScale has made strategic advancements, including a landmark agreement in August 2025 with ENTRA1 Energy and the Tennessee Valley Authority (TVA) to deploy up to 6 gigawatts of SMR capacity, a deal that initially spurred a stock surge. However, SMR technology faces ongoing challenges, including high upfront capital costs and lengthy permitting processes.

Financially, NuScale maintains robust cash reserves of $489.9 million as of June 30, 2025, and an Altman Z-score of 26.74, indicating low bankruptcy risk. Nevertheless, the continuous selling pressure from a major shareholder combined with a high valuation for a company yet to demonstrate substantial commercialization poses near-term headwinds. The potential for Fluor to sell additional shares through December 31, 2026, albeit with daily trading volume limitations, suggests continued supply-side pressure on NuScale's stock.

The long-term trajectory for NuScale will depend on its ability to transition from strategic advancements and regulatory approvals to proven commercial deployment and sustained profitability, especially as the SMR market matures and competition evolves.