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NuScale Power and Nano Nuclear Energy are both early-stage companies hoping to capitalize on the re-adoption of nuclear energy as a clean, scalable energy source.
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Both companies are in the business of developing small nuclear reactors.
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NuScale and Nano still have a long way to go in terms of commercialization and profitability.
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10 stocks we like better than NuScale Power ›
Nuclear energy has experienced a resurgence in recent years. Around the world, governments and corporate stakeholders are increasingly looking to nuclear as a cleaner, more scalable energy source than past options. This resurgence is fueled by the growing demand for energy to feed artificial intelligence (AI) data centers and has sparked significant interest in nuclear power produced by small nuclear reactors.
All of this has led to increased speculation in stocks such as Newcastle Power (NYSE: SMR) and Nano nuclear energy (Nasdaq: NNE). Both stocks enjoyed a bull run last year but have experienced pullbacks in recent months. Volatility is a byproduct of speculation.
The question now is, between these two nuclear energy stocks, which one has the better opportunity?
NuScale and Nano Nuclear Energy are both in the small modular reactor (SMR) business. The U.S. Department of Energy notes that small and medium-sized reactors offer many cost and efficiency advantages.
NuScale specializes in developing permanently installed SMRs. Nano’s specialty is microreactors, which offer the end user greater flexibility and modularity. Both companies are still in their early stages.
Investors evaluate each company based on future potential rather than current performance. While the Nano may be the “smaller” of the two, don’t think that means this company has greater potential upside.
Currently, NuScale has a market capitalization of about $6 billion, while Nano has a market capitalization of about $1.75 billion. First, this may indicate that Nano has greater long-term upside potential. While that’s possible, Nano’s lower market cap may also reflect greater uncertainty about its future success.
After all, NuScale’s reactor has received regulatory approval and is in the commercialization phase. Last year, revenue was $40 million, and sell-side analysts estimate sales could more than triple this year.
Unless Nano releases some game-changing regulatory or commercial partnership news, NuScale Power is the more established option among these nuclear startups and the stronger one from a risk/reward perspective.