Small modular reactors (SMRs) represent a significant advancement in nuclear energy technology, being considerably smaller than traditional nuclear power plants. These reactors are designed for prefabrication and on-site assembly, aiming to reduce both construction time and costs. While individual SMRs generate less power than their larger counterparts, they can be deployed in a modular fashion to create larger power plants. This inherent flexibility makes them ideal for remote locations where full-scale nuclear facilities are impractical, and they are also well-suited for directly supplying power to data centers. The International Energy Agency (IEA) projects substantial growth in SMR investments, anticipating an increase from $5 billion today to over $25 billion by 2030, eventually reaching a cumulative total of $670 billion by 2050.
In this burgeoning market, two prominent companies, NuScale Power and GE Vernova, are vying for leadership, each with distinct strategies. NuScale Power focuses on compact SMRs, such as its VOYGR units, which generate 77 MWe and are small enough for segment transport via trucks. NuScale holds a significant advantage with its VOYGR SMRs being the sole design to receive full certification from the U.S. Nuclear Regulatory Commission (NRC). However, the company does not expect its reactors in Romania and the U.S. to become operational until the early 2030s. In contrast, GE Vernova offers larger SMRs like the BWRX-300, which produces 300 MWe, comparable to a mid-sized fossil-fuel plant. While GE Vernova's SMR is considerably larger and less portable than NuScale's, it is actively progressing through the regulatory approval process, with plans to deploy its first reactor in Canada by 2030.
NuScale and GE Vernova also operate under different business models. NuScale's revenue primarily stems from front-end engineering and design (FEED) studies, licensing fees, and consulting services until its SMRs become operational. Analysts predict a substantial increase in its contract revenue, from $31.5 million to $276.5 million between 2025 and 2028, but profitability is not anticipated in the near term, and its stock valuation appears high relative to projected sales. GE Vernova, a more established and diversified energy company, was recently spun off from General Electric in 2024. Its business is broadly divided into Power, Electrification, and Wind segments, with the Power and Electrification divisions experiencing rapid growth driven by the demands of cloud computing, data centers, and artificial intelligence. Although nuclear energy currently constitutes less than 3% of its revenue, this segment is expected to expand significantly with SMR deployments. Analysts forecast impressive growth for GE Vernova, with revenue and adjusted EBITDA expected to increase at CAGRs of 17% and 60%, respectively, from 2025 to 2028, and its stock is trading at a more attractive valuation compared to NuScale.
Considering the current landscape, GE Vernova emerges as the more favorable investment compared to NuScale. While both companies are making strides in the SMR sector, GE Vernova's diversified business, robust financial foundation, and broader strategic initiatives provide a stronger buffer against market volatility and offer more immediate growth drivers. The company's engagement with the high-demand AI energy infrastructure market further bolsters its long-term prospects. Investing in companies like GE Vernova, which integrate innovative technologies with established market presence, supports the transition towards a sustainable energy future and underscores the importance of strategic diversification in pioneering industries.
