Key Points
- Shares of small modular reactor (SMR) developers NuScale Power (NYSE: SMR) and Oklo (NYSE: OKLO) have fallen approximately 48% and 51%, respectively, since the start of 2026.
- Despite bullish long-term forecasts—such as Bank of America’s projection of a $10 trillion nuclear opportunity driven by AI data center demand—the sector lacks a critical catalyst: binding, large-scale financial commitments from customers.
- The market is closely watching for a signed power purchase agreement (PPA), particularly NuScale’s potential deal with the Tennessee Valley Authority (TVA) for a 6-gigawatt deployment.
2026 has proven difficult for nuclear energy equities, but the selloff has been especially severe for companies developing small modular reactors. NuScale Power has seen its share price decline by 48% this year, while Oklo has lost 51% of its value.
The downturn stands in stark contrast to the fundamental narrative surrounding the sector. A recent Bank of America Institute report projects nuclear energy will represent a $10 trillion opportunity over the next 25 years, fueled by hyperscalers desperate for reliable, carbon-free power to feed electricity-hungry AI data centers. The bank highlights SMRs as a pivotal technology capable of deploying faster and with lower upfront capital than traditional plants, potentially reshaping nuclear supply chains over the next decade.
However, the market remains skeptical that this theoretical potential will translate into commercial reality. To date, only two SMRs have been successfully deployed—one in China and one in Russia—both relatively small in scale. While more than 80 projects are in various stages of development, many lack secured funding.
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This skepticism is rooted in recent history. In 2023, NuScale’s flagship project with the Utah Associated Municipal Power Systems (UAMPS) was terminated by the customers. Industry analysts warned at the time that the financial challenges and cost overruns observed in that project were structural issues likely to affect any SMR deployment.
Currently, NuScale lacks firm financial commitments from the customers comprising its backlog, while the majority of Oklo’s agreements remain non-binding memoranda of understanding. The central question for investors is whether these pipeline deals will convert into financed, constructible projects.
The Catalyst: Converting Pipeline to Binding Contracts
A potential catalyst may be approaching. NuScale’s chief financial officer has indicated the company aims to finalize a power purchase agreement with its largest prospective customer, the Tennessee Valley Authority, potentially by year-end. A signed PPA would obligate the utility to purchase the plant’s output, effectively de-risking the financing required to begin construction on a planned 6-gigawatt facility—which would be the world’s largest SMR deployment by a significant margin.
Given NuScale’s previous failure to close its lead project, a 2026 PPA is not assured. Nevertheless, evidence that either NuScale or Oklo can convert non-binding interest into bankable, long-term contracts at scale remains the specific catalyst the market requires to re-rate the sector.