UBS has downgraded its outlook on NuScale Power Corporation (SMR), citing mounting near-term risks tied to project timelines and capital constraints. The move underscores growing skepticism around the commercial viability of small modular reactors despite long-term clean energy potential.
- NuScale Power’s first SMR project delayed to 2029, two years behind original schedule
- Over $800 million spent on development since 2017, with $1.2 billion projected through 2027
- Federal loan guarantee of $1.4 billion still pending final disbursement
- Stock down 40% year-to-date amid investor concerns over capital needs and execution
- UBS cites supply chain, engineering revisions, and funding uncertainty as primary risks
- Broader implications for advanced nuclear and clean tech equity valuations
UBS has issued a cautious recommendation on NuScale Power Corporation (SMR), highlighting significant near-term hurdles that could delay the company’s path to commercial operations. The firm points to the extended timeline for the deployment of the company’s first commercial SMR unit at the Idaho National Laboratory, now projected for 2029—two years behind original forecasts. This delay, coupled with the need for additional capital raises, has prompted the bank to revise its near-term expectations downward. Key figures from the report indicate that NuScale has already spent over $800 million in development and regulatory efforts since 2017, with an estimated $1.2 billion required through 2027 to complete the first project and advance its next-generation reactor designs. Despite receiving $1.6 billion in federal funding commitments, including a $1.4 billion loan guarantee from the U.S. Department of Energy, execution risks remain elevated due to unresolved supply chain bottlenecks and engineering revisions. The stock, which has declined over 40% year-to-date, reflects investor concern over sustained dilution and uncertainty in project delivery. Analysts note that NuScale’s ability to secure private equity or strategic partnerships will be critical to maintaining momentum. The caution from UBS, a major global financial institution, may influence institutional holdings and trading strategies in the nuclear innovation space. Market impact is broad, affecting other clean energy equities with heavy R&D exposure, particularly those in advanced nuclear and carbon-neutral technologies. Investors in the energy transition sector are now reassessing the risk-reward profile of early-stage nuclear ventures, shifting focus toward more proven renewable infrastructure.