Artificial Intelligence (AI) and electrification are running the world to require more energy. A form of electric power generation that is coming back into vogue is nuclear power. Large companies are making commitments to buy power from nuclear power plants, while utilities are expanding contracts for existing features and planning to bring new power sources to life over the next few years.

Picnic Naskale power corporation (NYSE: SMR)Start-Up is working on small modular reactor technology to license third party, it is expected that technology will be democraticized. Stock shares have increased by 250% last year by defeating the average of the broad market. But is it a purchase right now?

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Betting on new nuclear power development

Small modular reactors are almost self-distinct. Unlike traditional large nuclear power plants, these are small systems (theoretically) a bunch can be made more efficiently by combining a bunch together or a system for a small energy requirement. Using similar techniques for traditional power plants, nuscale power wants to help improve utilities to help make a nuclear power plant, which may be a challenging offer.

So far, it has not built any real reactors, but it is the first and only company to receive approval from the Atomic Regulatory Commission (NRC) for a small modular design. This occurred in 2023, recently there is an approval for the same design, but just a separate power generation. The company has no customer order yet, but the management believes that anyone will reach by the end of 2025, given that it is fully approved with its designs. It is also studying an old coal power plant in Romania to see the feasibility of converting it into nuclear power feature.

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Canceled projects, delayed timelines

Right now there is a lot of enthusiasm about Nuscale Power. Energy spending every year in the United States is more than $ 1 trillion every year. If nuscale power can commercialize technology in power generation with its small modular reactors, then there may be heavy revenue capacity.

The problem is that no major customer has yet committed to any project. It planned a project with a Utah utility that began in 2015. However, due to the major cost overran and delayed timeline, utility canceled the project in 2023. This is not a good sign for the viability of small modular reactors. Companies that designing heritage nuclear power systems with proven viability, yet struggle to find the utilities designed to invest in nuclear power projects. A fully unproven technology is a difficult ask for utilities and their shareholders for risk.

SMR Revenue (TTM) Data by Ycharts.

Is Nuscale Power Stock a purchase?

Today, after going so up in the last one year, on Nuscale Power Stock Trades market cap $ 11 billion. Even though it generates a little revenue from the study in Romania, the company can usually be considered a pre-revenue start-up, never sold to customers. Its revenue in the last 12 months is $ 49 million and $ 98 million in negative free cash flow.

The company is constantly raising money from capital markets. Its shares keep on arrearing because they have to raise money to stem their major cash burn. Rising share dilutes outstanding shareholders, which will be a headwind for long -term returns. It is not clear whether the company may have signed a viable project contract soon, and even if a project is signed, it takes several years to be built, modules or not.

Even if a project is planned, the stock is already pricing in this growth. In a market cap of $ 11 billion, the company needs to eventually produce billions of dollars in revenue to make sufficient returns for shareholders. Add all this, and the nuscale power stock looks like a highly risky stock that investors should now keep out of their portfolio.

Should you currently invest $ 1,000 in Nuscale Power?

Consider before you buy stock in Naskal Power:

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