NuScale shares slump 45% as TVA power purchase agreement remains elusive
Management expresses optimism for a definitive deal by year-end, but investors face uncertainty as the stock trades near multi-year lows.
NuScale Power has seen its shares decline by approximately 45% in 2026, reducing the company’s market capitalisation to $3.2 billion. The downturn follows a period of stagnation since the firm signed an initial agreement with the Tennessee Valley Authority (TVA) in September 2025, at which point shares traded around $40. The stock price fell below $10 earlier this month before recovering slightly, reflecting investor frustration over the lack of tangible progress on the project.
The primary catalyst under scrutiny is the potential signing of a definitive Power Purchase Agreement (PPA) with TVA for a 6 GW small modular reactor facility. While the initial deal signed last year was largely non-binding, a PPA would commit TVA to purchase power at a predetermined price, thereby guaranteeing revenue streams and enabling construction to proceed. Without this commitment, NuScale continues to face limited and costly access to capital.
NuScale management has expressed confidence that a definitive agreement could be finalised by the end of 2026. During an investor call in May, the company’s chief executive officer noted that discussions with financing partner ENTRA1 are advancing well. The chief financial officer described it as a “strong possibility” that TVA will “come across the line” later in the year, though he acknowledged that no guarantee exists.
The nuclear energy sector, particularly small modular reactors, is projected by Bank of America to represent a $10 trillion opportunity in the coming decades. However, NuScale’s stock performance has diverged from broader sector optimism, with the company having previously failed to meet its own guidance. This historical precedent has contributed to the current valuation discount, despite the potential scale of the TVA project.
Market sentiment remains cautious, with The Motley Fool’s Stock Advisor service not including NuScale in its current list of top 10 stock recommendations. While the company specialises in technology expected to capture a significant share of the growing nuclear market, the immediate focus for investors remains the resolution of the TVA negotiations and the subsequent impact on the company’s financial viability.
