NuScale Power Short Seller Profits Send Stark Warning to Investors

In 2025, the story of NuScale Power (SMR) captivated Wall Street. As one of the leading companies in the small modular reactor (SMR) sector, SMR's market capitalization reached approximately $3.8 billion. However, by 2026, SMR stocks have plummeted by 83% from their highest point, significantly underperforming other markets. The question remains: will the decline continue over the next year? Let us delve deeper into the matter.

SMRs are compact nuclear power plants, constructed using factory-made components. These reactors produce around 300 megawatts of energy, which is considerably less than traditional reactors with over 1,000 MW. The appeal of SMRs lies in their quicker construction, lower costs, and ability to provide power near the point of consumption. Some AI hyperscalers showed interest in SMRs in late 2025, contributing to their share prices rising.

However, according to Adam Stein, Director of Nuclear Energy Innovation at the Breakthrough Institute, the SMR sector went through a textbook hype cycle, with stock prices inflating due to speculation rather than revenue. Short sellers made an estimated $2 billion betting against NuScale, Nano Nuclear (NNE), and Oklo (OKLO) in the past year, resulting in these companies and their peers losing a combined $30 billion in market value.

A significant portion, 18%, of NuScale's outstanding shares are currently borrowed, indicating short selling activity, according to S&P Global Market Intelligence.

While U.S. data-center power demand is expected to increase from 35 gigawatts in 2024 to 106 GW by 2035, the U.S. Department of Energy allocated $17.5 billion in loans in June 2026 to bolster the domestic nuclear energy supply chain. Yet, analysts at BNP Paribas pointed out a shortage of specialized nuclear fuel required for many SMR designs. Many reactors are not anticipated to be operational until 2030 or later.

During NuScale's Q2 2026 earnings call, management attempted to differentiate the company from its competitors. CEO John Hopkins assured investors that NuScale is the only SMR company with design certification from the U.S. Nuclear Regulatory Commission and uses conventional low-enriched uranium. SMR stock currently holds a "Moderate Buy" rating on Wall Street, with an average price target of $13.53, representing a potential upside of 42% from the current level.

Short sellers continue to bet on the difference between NuScale's promises and its dwindling revenue, likely to remain profitable until a definitive contract is secured.