Nuclear energy has become one of Wall Street’s more closely watched investment themes as artificial intelligence and data centers put new pressure on the U.S. power grid.
Due to data centers, AI, and industrial growth, the U.S. Department of Energy expects electricity demand to rise significantly.
The federal government has supported that forecast with dollars.
In March of 2025, the Energy Department published a request for $900 million to assist the development of American-made Generation III+ small modular reactors.
The market opportunity is so much bigger.
The Energy Department has predicted the U.S. may need as much as 200 gigawatts of new nuclear capacity by 2050 to fulfill rising energy demand.
That suggests a potentially huge opportunity for those that can get new reactors into commercial operation.
One company aiming to get there is NuScale Power (SMR).
But Wall Street doesn’t think every nuclear stock will necessarily emerge as a winner.
UBS downgraded NuScale Power to Sell from Neutral and cut its price target to $6 from $10.
That implied roughly 40% downside from the stock’s level when the analyst call was issued.
And the questions raised by UBS go to the heart of the conundrum hanging over the growing small modular reactor industry: How soon can promising reactor technology be turned into a working commercial power plant?
UBS slashes NuScale Power stock price target
UBS’s negative argument is about execution.
Competitors are going into construction, whereas NuScale has an expected build time of more than five years and no concrete client commitments, the analyst said.
UBS said such circumstances presented “meaningful challenges.”
The bank now forecasts just one NuScale project breaks ground in 2028 and sees a cumulative cash burn of $700 million from 2026 through 2028.
That provides a stark contrast between excitement for nuclear power and the dangers of actually bringing a new reactor design to market.
Those dangers are not exclusive to NuScale.
Energy Department officials have recognized utilities’ and other prospective consumers’ worries about cost overruns in development and abandonment of projects.
DOE has also projected that order books of five to 10 deployments of at least one reactor type may be required to support advanced nuclear and reach commercial scale.
NuScale has already passed a big regulatory barrier.
NuScale’s US460 standard plant design received approval from the U.S. Nuclear Regulatory Commission in May 2025.
The design has six modules each generating 77 megawatts of power, making the overall plant capacity 462 megawatts.
The NRC said its clearance means the design may be cited in applications for building permits, operating licenses and combination licenses.
The agency finished its review in 22 months, two months ahead of schedule.
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The NRC also has the underlying regulatory documentation for the approval of NuScale’s US460 design, giving investors the key record of the company’s regulatory development.
That gives NuScale a distinctive position.
We see concrete regulatory progress.
The bigger issue is the commercial timeframe.
NuScale Power has substantial liquidity but is burning cash
The $700 million cash-burn estimate from UBS is more substantial against NuScale’s most recently disclosed balance sheet.
NuScale reported $766.5 million in cash and cash equivalents as of June 30, 2026, in its quarterly filing with the Securities and Exchange Commission.
The company also held $305.7 million of short-term investments and $820.8 million of investments.
The total of these three categories is over $1.89 billion.
NuScale reported no debt and stated it anticipates that its cash, investments, and continuous access to capital markets would be adequate to satisfy its cash needs for at least the next 12 months and beyond.
But the other side of the company’s financials provides insight into why cash burn is critical to UBS’s theory.
NuScale has lost money since company was founded and recorded a cumulative deficit of $824.4 million as of June 30.
Cash spent in operating operations was $372.9 million during the first six months of 2026, compared with $56.1 million for the same period in 2025.
The increase was mostly due to a $259.9 million payment to commercialization partner ENTRA1 and reduced collections from customers and vendor prepayments for long-lead supplies, NuScale said.
NuScale too has gone to its stockholders for a big financial infusion.
The corporation sold roughly 89.7 million Class A shares via an at-the-market program in the first six months of 2026.
Those sales yielded $1 billion in gross profits, or around $984.5 million after issuance expenses, the document said.
The weighted average price of sales was $11.14 per share.
That funding gave NuScale a major cash boost but also speaks to a key portion of the investment equation.
Until commercial projects generate sufficient cash, access to capital markets remains an important source of funding.
NuScale’s annual report also gives further insight on the company’s commercialization agreements including its ties with RoPower Nuclear and ENTRA1 Energy.
NuScale’s Romania project offers a counterpoint to UBS concerns
The bearish thesis isn’t without important counterarguments.
But there are significant counterarguments to the pessimistic view. One of the biggest is Romania.
NuScale has been collaborating with RoPower Nuclear on a planned 6-module small modular reactor project at the old Doiceşti coal-power facility.
The project has moved beyond the original idea proposal stage.
Romanian nuclear power plant Nuclearelectrica stated that it would finish the second phase of the front-end engineering and design by the end of 2025.
That job comprised project cost estimates, scheduling, licensing and permitting information, and financial modelling required for the next phase of the project.
Next came a milestone of greater importance.
On Feb. 12, 2026, shareholders approved the final investment decision for the Doicești small modular reactor project.
That is substantial development for a corporation that is being challenged on its ability to transform technology into practical projects.
But making a choice to invest and having a nuclear power plant that is up and running are completely different achievements.
Nuclear plants take years to license, finance, build and complete before they generate power.
And that is the gap UBS regards as a concern.
NuScale also has a potentially far bigger possibility in the US.
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TVA and NuScale have announced support for an ENTRA1 Energy initiative, with plans to install up to 6 gigawatts of NuScale small modular reactor capacity throughout TVA’s seven-state area in September 2025.
The size is substantial, but investors need to differentiate a projected deployment program from reactors currently under construction or in operation.
That divergence is especially noteworthy in light of UBS’s concern regarding solid customer agreements.
So whether NuScale can turn theoretical deployments into commercial off-take agreements and ultimately construction might be one of the most crucial variables in deciding whether UBS’s gloomy thesis plays out.
NuScale Power faces competitors moving toward construction
The rivalry makes NuScale’s timeframe extremely relevant.
The Nuclear Regulatory Commission’s advanced-reactor docket shows other developers and utilities pushing projects through construction-related regulatory milestones.
For example, in May 2025, TVA filed the last part of its building permit application for a BWRX-300 small modular reactor at its Clinch River plant in Tennessee.
That helps explain why UBS is focused not simply on whether NuScale can eventually deploy its technology but on when that deployment can happen.
Timing is key in a market where utilities, IT corporations, and other big electrical consumers are looking for more dependable power.
The Department of Energy’s advanced-nuclear study projects the U.S. will require around 200 gigawatts of new nuclear power by 2050.
The agency also cautioned that the time it would take to ramp up deployment might make the ultimate buildout substantially harder.
A DOE scenario that begins large-scale deployment by 2030 and reaches 13 gigawatts per year by 2040 could put the U.S. on track to add 200 gigawatts of nuclear capacity by 2050.
A five-year delay might mean more than 20 gigawatts a year of deployment and could raise capital needs by as much as 50%.
Thus, the opportunity is potentially immense.
But speed counts.
Wall Street downgrade raises stakes for NuScale Power stock
The downgrading by UBS has left NuScale’s investors with two very different views of the company’s tale.
There is a lot of evidence for the bullish case.
NuScale has a 462 megawatt US460 plant design authorized by the NRC.
Romania’s Doicești moves to final investment decision after second front-end engineering phase
ENTRA1 and TVA are investigating a possible program of 6 gigawatts of NuScale-powered capacity.
NuScale also concluded June with about $1.89 billion in cash, short-term assets and investments and no debt.
Also, the background of the sector is positive.
The U.S. government anticipates more demand for power and has committed hundreds of millions of dollars to speed up the deployment of domestic small modular reactors.
But UBS is looking at what hasn’t occurred yet.
The bank has a long development timeframe, not enough definite customer commitments, rivals moving toward building and a significant capital burn before NuScale hits the milestones investors are looking for.
The cash dilemma is hard to ignore when considering NuScale’s own financial disclosures.
During the first half of 2026, the business utilized $372.9 million of cash in operational operations and raised approximately $1 billion via stock sales.
That doesn’t mean UBS’s $6 objective will be accurate.
They do demonstrate how important execution is.
The fundamental assumptions behind the Sell rating might alter if NuScale converts prospective projects into binding commercial agreements and makes more rapid progress toward construction than UBS estimates.
If capital continues to flow out of the firm, and timetables become extended, the analyst’s warning becomes more serious.
That makes the next chapter of NuScale’s tale less about the future of nuclear power.
The Department of Energy’s estimates are clear: Washington views nuclear power as a key element of addressing growing U.S. energy needs.
For NuScale stockholders, the more pressing issue is whether this specific nuclear business can transform regulatory clearances, alliances and planned projects into running reactors swiftly enough to justify its value.
UBS isn’t buying it.
