How Buying NuScale Power Stock Today Could 10X Your Net Worth
Key Points
If NuScale shares rose 1,000% in value, the company would be worth just $43 billion.
In total, NuScale is chasing a $1.1 trillion opportunity.
After a brief correction and subsequent rebound, NuScale Power (NYSE: SMR) -- a popular nuclear energy stock -- currently has a market cap of just $4.3 billion. If shares rose in value by 1,000%, the company's market cap would still be somewhere around $43 billion. While there is plenty of execution risk, this magnitude of upside potential is clearly possible given the market estimates discussed below.
NuScale Power is targeting a $1.1 trillion opportunity
According to analysts from Goldman Sachs, nuclear energy is now "a key area of focus globally as countries revisit the technology after many years of underinvestment." Increased investment in nuclear energy technology is already on the rise. "Global investment in nuclear power generation grew at a compound annual growth rate of 14% between 2020 and 2024, following almost five years of no growth in spending," a recent Goldman Sachs report concluded.
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NuScale, of course, isn't betting on nuclear power in general. The company specifically designs small modular reactors, or SMRs. These are essentially miniature nuclear power plants, making them faster, easier, and cheaper to construct.
What does Goldman Sachs think about SMRs? "As investment in nuclear energy has started to pick up globally, countries are allocating money not only to large nuclear reactors but also to newer variants such as small modular reactors (SMRs)," the bank's analysts observe. "This represents a largely greenfield growth opportunity for the sector, as currently there are only two licensed, approved, and operating small modular reactors and one test reactor operating across the globe."
Image source: Getty Images.
NuScale doesn't have any reactors constructed yet. But it is the only operator in the U.S. with SMR designs approved by the Nuclear Regulatory Commission. And while it has faced project cancellations in the past, it currently has several major projects in the pipeline, including a 6-gigawatt project for the Tennessee Valley Authority, a major electric utility.
Estimates for the SMR market in particular vary widely. But Goldman Sachs estimates a $1.1 trillion total addressable market by 2035. This is clearly a large enough market for NuScale to become a 10x stock. The wait, however, will be long. And there's plenty of competition, too, both from pure play SMR developers and diversified conglomerates with bigger budgets. So yes, NuScale is a potential 10x stock. But expect plenty of volatility and a long holding period.
Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool recommends NuScale Power. The Motley Fool has a disclosure policy.