Today's surge in NuScale Power's stock price could be attributed to...
Shares of NuScale Power (drop in SMR value by -0.20%) saw a rise today following the release of its third-quarter results last night.
Although the figures themselves weren't exactly captivating, investors seemed pleased with management's commentary on the company's progress.
This positive sentiment led to a 4.3% increase in the stock's value by 1:42 p.m. ET, with the rise reaching as high as 19.2% earlier in the session.
NuScale treads on a path, step by step
NuScale reported a revenue of $475,000, a net loss of $17.5 million (or $0.18 per share), in contrast to forecasts of $3.14 million in revenue and a loss of $0.09 per share. The company ended the quarter with $161.7 million in short-term investments and no debt.
While these figures might seem insignificant, the stock is generally viewed as a bet on large tech companies embracing nuclear energy for their data centers, and NuScale is a potential frontrunner in this space.
Remaining the only company to receive approval for small modular reactors (SMRs) from the Department of Energy, NuScale also signed a contract with its major stakeholder, Fluor, to continue research for an SMR power plant in Romania. If successful, this would be the first of its kind in Europe. Fluor is also planning to divest from its stake in NuScale.
Management also highlighted progress in their collaboration with data center and AI clients, and mentioned that supply chain partner Doosan Enerbility was making strides with its first NuScale Power Modules.
Can NuScale continue to rise?
The data center narrative has played a significant role in boosting NuScale's stock, and according to McKinsey, consumption of U.S. electricity by data centers is projected to increase from 3-4% to 11-12% between 2023 and 2030, presenting a substantial opportunity for NuScale and its competitors.
Watch out for NuScale's project development as it has yet to launch a project, but with the growing interest in nuclear energy, the potential upside for the stock is substantial.
Investors are keen on financing NuScale's growth due to its position as a potential leader in the emerging market of nuclear energy for data centers. The positive sentiment towards the company's third-quarter results led to significant increases in its stock value.
As a strategic move, Fluor is planning to divest from its stake in NuScale, indicating a strong belief in NuScale's potential for independent financial success.
