By Leo Sun
Key Points
After the Fukushima disaster in 2011, the nuclear energy
market suffered a decade-long decline as many countries throttled or
suspended their nuclear expansion plans. But over the past few years,
the nuclear market has recovered -- thanks to new decarbonization
initiatives, safer reactor technologies, and the growing demand for
reliable, efficient power.
According to the International Atomic Energy Agency (IAEA), the
world's nuclear capacity could expand by up to 2.6 times from 2024 to
2050. Therefore, it could be the right time to buy these two nuclear
energy stocks: NuScale Power (NYSE:SMR) and GE Vernova (NYSE:GEV).
Image source: Getty Images.
NuScale Power
NuScale Power develops small modular reactors (SMRs) that fit in
vessels that are only 65 feet high and nine feet wide. They're
prefabricated and assembled on site to reduce the time and costs
required to construct a nuclear power plant. It's the only SMR maker
with Standard Design Approvals (SDAs) from the U.S. Nuclear Regulatory
Commission (NRC), which approved its 50 MWe reactor design in 2023 and
its 77 MWe design in 2025.
NuScale once planned to deploy six of its 77 MWe SMRs to build a 462
MWe plant in Idaho, but that project collapsed amid soaring costs in
2023. Today, it primarily serves as a subcontractor to Fluor (NYSE:FLR) in its planned construction of a similar 462 MWe plant for Romania's RoPower.
That project recently received its final investment decision (FID)
approval, but the first reactors probably won't come online until the
early 2030s. For now, it still generates most of its revenue from the
front-end engineering and design (FEED) studies for this project.
NuScale also recently returned to the U.S. by agreeing to deploy up
to six gigawatts of SMR capacity across seven states for the Tennessee
Valley Authority (TVA). However, the first reactors for that ambitious
project probably won't be installed until 2032.
With a market cap of $4 billion, NuScale might seem overvalued at 45
times this year's sales. However, analysts expect its annual revenue to more than triple
from $88 million in 2026 to $287 million in 2028 as it expands its FEED
studies, transitions some of its memorandums of understanding (MOUs)
into binding contracts, and licenses its technology to more companies.
That said, the real growth story could start in the next decade when
it finally deploys its first SMRs. When that happens, NuScale could
expand and evolve into a much larger nuclear company -- so it might be
smart to nibble on its stock today before that happens.
GE Vernova
If NuScale seems a bit too speculative, GE Vernova -- the former energy division of GE (NYSE:GE) that was spun off in 2024 -- might be a more balanced bet.
Last year, over half of its total orders came from its Power segment,
which produces gas turbines for combined-cycle plants, steam turbines
for coal, gas, and nuclear plants, and services for nuclear power
plants. Its Electrification business, which accounted for nearly a third
of its 2025 orders, sells transformers, breakers, substations,
high-voltage direct current systems, and automation, optimization, and
protection services for electrical grids.
Its Power and Electrification businesses both profited from the rapid expansion of the power-hungry cloud,
data center, and AI markets over the past year, and that growth offset
the slower growth of its smaller Wind business, which sells onshore and
offshore wind turbines.
Over the next few years, GE Vernova plans to continue expanding its
higher-growth Power and Electrification businesses while right-sizing
its weaker Wind business. It definitely isn't a "pure play" nuclear
stock like NuScale. Still, it's bigger, better diversified, firmly
profitable, and will benefit from the same tech-driven tailwinds for the
broader energy market.
From 2025 to 2028, analysts expect GE Vernova's revenue and adjusted
earnings before interest, taxes, depreciation, and amortization (EBITDA)
to grow at CAGRs of 15% and 54%, respectively. With an enterprise value
of $217 billion, it might seem a bit pricey at 38 times this year's
adjusted EBITDA -- but its core strengths should justify that higher
valuation.
However, don’t buy any shares just yet
Because my colleague, Mark Rogers, has released this special report.
It’s called ‘5 Stocks for Trying to Build Wealth After 50’. And it’s yours, free.
Of course, the decade ahead looks hazardous. What with rampant
inflation, a ‘cost of living crisis’ and war in Ukraine, knowing where
to invest has never been trickier. And yet, with so many shares below recent highs, there are also potential opportunities to strike.
That’s why now could be an ideal time to secure this valuable investment research.
Mark’s ‘Foolish’ analysts have scoured the markets low and high.
This special report reveals 5 of his favourite long-term ‘Buys’.
Please, don’t make any big decisions before seeing them.
Leo Sun
has no position in any of the stocks mentioned. The Motley Fool has
positions in and recommends GE Aerospace and GE Vernova. The Motley Fool
recommends NuScale Power. The Motley Fool has a disclosure policy.
This article was first featured on The Motley Fool
:max_bytes(150000):strip_icc()/GettyImages-2207441203-ce430326e0d44e53b804c29be4965c35.jpg)
