Today's fluctuation in NuScale Power's stock price: Initial surge followed by a dip.
Shares of NuScale Power, a company specializing in the creation of small modular reactors (SMRs), saw an early surge this morning following a declaration from the White House regarding the expansion of nuclear energy production.
The stock surge peaked at around 13% during morning trading, but subsequently decreased as smaller company shares experienced a broader decline, hinting at the waning influence of Trump's election.
Consequently, the stock concluded the day with a 1.1% decrease while the Russell 2000 dipped 1.8%, with the smaller-cap index losing all of the previous day's gains and even more.
The nuclear landscape is improving
The White House has unveiled a plan targeting a tripling of nuclear energy production by 2050, and this strategy encourages the use of SMRs, which it regards as having "promising potential for dependable grid power and robust off-grid electricity."
The plan also mentions NuScale's VOYGR power modules and intends to allocate $900 million towards the deployment of new SMR technologies, potentially benefiting NuScale directly.
Despite this positive momentum, the stock didn't manage to secure a victory for the day as broader market trends influenced it negatively by the market close.
It's worth noting that NuScale doesn't currently generate considerable revenue, and the stock's volatility is closely tied to investor sentiment towards the nuclear sector.
Is NuScale a smart investment?
Public policy has the potential to significantly impact the nuclear sector, and the recent actions of major tech companies seeking nuclear energy sources for their AI data centers serve as encouraging indicators.
The Trump administration is widely anticipated to hold a positive opinion towards nuclear power, including SMRs like those NuScale focuses on developing.
Even so, investors in NuScale and the broader sector must maintain patience, as no SMRs are expected to commence operations until the end of the decade. For now, anticipate continued volatility as investors speculate about the future role of nuclear energy and SMRs.
In light of the White House's plan to triple nuclear energy production by 2050, with a focus on SMRs like those developed by NuScale, some investors might consider allocating their finance to NuScale Power, as they see potential returns from investing in this sector. However, the stock's volatility remains high due to the industry's uncertain future and the lack of immediate revenue generation by NuScale.
