NuScale Power Faces Short-Term Caution Amid Strong Momentum and Regulatory Milestones

Technical Analysis

NuScale Power Corporation (SMR) closed at $31.99 on May 30, 2025, down 3.00% intraday, following a recent parabolic rise of approximately 80-93% over the past month. The stock is currently trading well above both the 50-day ($18.97) and 200-day ($18.30) moving averages, signaling a strong uptrend. However, the Relative Strength Index (RSI) sits at an elevated 81, indicating overbought conditions which may precipitate a short-term pullback or consolidation. Support is anchored near $30.24, slightly below the stop-loss level at $30.27, while resistance stands at $32.98, just above the current price. The MACD is positive at 3.75, confirming underlying upward momentum amid elevated Average True Range (ATR) readings of 7.75, suggesting heightened volatility.

For the next trading day (June 2, 2025), the technical signals imply potential for modest retracement or sideways action, given the overextended RSI and recent dip. Over the coming week, barring negative catalyst, the stock may attempt to retest resistance near $33 with a cautious approach from traders due to the stretched momentum and volume spikes (15.48 million, well above average of 9.56 million).

Fundamental Analysis

NuScale Power operates in the advanced nuclear energy sector, leveraging small modular reactor (SMR) technology. The company's recent receipt of Standard Design Approval from the U.S. Nuclear Regulatory Commission for its uprated 77 MWe modules marks a significant regulatory milestone, strengthening its competitive positioning and potential revenue pipeline. Strategic partnerships and favorable regulatory trends, including supportive U.S. policy on nuclear energy and uranium production, underpin a positive sector outlook.

Financially, the company remains unprofitable with a trailing twelve-month (TTM) EPS of -$1.37 and a negative P/E ratio of -23.35, highlighting ongoing developmental and operational expenses typical for early-stage energy technology firms. The next earnings release is due August 14, 2025, which could inject directional clarity.

Market capitalization stands at $4.27 billion, categorized as mid-cap with strong trading liquidity. Analyst consensus is predominantly bullish with seven buys, one hold, and one sell, yielding an overall consensus of "Buy" and a median price target of $35.00, suggesting moderate upside (~9.7%) from current levels, with a high target of $41.00 and low of $24.00 reflecting some valuation dispersion.

Intrinsic Value and Long-Term Investment Potential

NuScale’s intrinsic value is complicated by negative earnings and nascent commercialization. The regulatory approval accelerates the path to revenue generation but execution risks such as supply chain constraints and potential delays curtail near-term cash flow visibility. The company's technology addresses a critical void in carbon-free base-load power, granting it a structural growth edge aligned with global decarbonization trends. If SMR technology scales successfully, NuScale could capture significant market share over the next decade, enhancing intrinsic value markedly beyond current market pricing.

Long-term investors should weigh the substantial execution and development risks against the transformative potential of the company’s technology. Recent price appreciation likely incorporates optimism about regulatory progress and sector tailwinds. However, observable volatility, negative profitability, and elevated multiples signal a speculative profile appropriate only for risk-tolerant investors with a multi-year horizon.

Overall Evaluation

SMR displays strong momentum and favorable positioning within a strategically important, innovating sector. The technical backdrop warrants caution over the short term due to overbought conditions and potential for consolidation. Fundamentally, regulatory milestones and partnerships lend credibility, but negative earnings and execution risks temper immediate valuation support.

Considering these factors, SMR qualifies as a *Hold* candidate. The stock warrants close monitoring to confirm sustainable profit trajectories post-earnings, alongside managing risk in the event of supply or execution setbacks. The moderate upside to price targets balanced against elevated risk and stretched technical indicators suggest maintaining current exposure rather than initiating or liquidating positions at this time.