I Love NuScale Stock for 1 Reason, and It's Not What You Think
Key Points
AI companies need more power quickly.
NuScale Power's biggest growth catalyst could hit this year.
The long-term growth story for nuclear power is clear. Artificial intelligence (AI) companies are scaling energy-intensive data center infrastructure as quickly as humanly possible. And the current energy grid isn't prepared for this unprecedented build-out. New energy sources will be needed quickly, and nuclear energy could deliver the reliable, low-carbon baseload power the AI industry craves.
NuScale Power (NYSE: SMR) has long appreciated this data center infrastructure demand tailwind. The company's small modular reactors (SMRs) are a great fit for adding large amounts of reliable power generation to the grid.
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This year, however, I think there's an even more exciting catalyst to pay attention to than general industry demand tailwinds.
NuScale Power could reach this critical milestone in 2026
NuScale remains the only nuclear developer in the U.S. approved by regulators to build an SMR system. But it has yet to even commercialize its approved designs. That could change later this year when the company suspects it could reach a power purchase agreement (PPA) with a major customer.
Earlier this year, NuScale's CFO predicted that a PPA could be signed by the Tennessee Valley Authority (TVA). The TVA has agreed to pursue a 6-gigawatt SMR system, but has yet to make any firm financial commitments. A PPA would essentially commit the utility to buying power from the system at a set price for years to come, paving the way for NuScale to begin construction.
If a PPA is signed, it would be hard to overstate its importance to NuScale's business model and stock price. NuScale shares have lost 40% of their value in 2026, largely due to waning investor enthusiasm over its project pipeline. A firm commitment from the largest customer in its pipeline would sizably shift sentiment.
Whether a PPA is signed this year remains to be seen. But this potential catalyst will, should it occur, drive the company's stock price this year far more than long-term demand tailwinds for nuclear power in general.
Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool recommends NuScale Power. The Motley Fool has a disclosure policy.