NuScale's Rally Driven by Policy and Analyst Shift, But Deep-Value Risks Persist

What happened

NuScale Power's stock jumped nearly 24% in early 2026, spurred by optimism around the Trump administration's nuclear roadmap that could fast-track commercialization. Bank of America upgraded the stock from 'Underperform' to 'Neutral' with a $28 price target, citing reduced downside risk. However, the DeepValue master report underscores that NuScale remains a pre-commercial company with no binding NuScale Power Module orders and negative free cash flow of -$199.94M for the latest period. Critical risks include a high cash burn rate of -$443M TTM, reliance on dilutive equity issuance via ATMs, and Fluor's planned exit creating an overhang. This rally appears to be a sentiment-driven rebound rather than a reflection of improved fundamentals or near-term commercialization progress.

Implication

The policy tailwind and analyst upgrade offer temporary relief but fail to mitigate NuScale's immediate financial pressures, including a liquidity runway of only about 1.5 years at current burn rates. The $28 price target aligns with the DeepValue report's 'Trim Above $28' level, suggesting limited upside and reinforcing caution at elevated prices. NuScale's path to profitability hinges on converting projects like RoPower FID by 2027, which remains uncertain and distant. Continued reliance on equity markets for funding will likely lead to further dilution, especially with Fluor's exit and expiring issuance limits post-February 2026. Thus, while the news reduces near-term sentiment risk, it does not alter the unfavorable risk-reward profile, making current levels unattractive for new investment.

Thesis delta

The policy support and analyst upgrade slightly improve near-term sentiment and align with the upper bound of the report's valuation range, but they do not shift the core investment thesis. NuScale's fundamental issues—no firm orders, high cash burn, and dilution risks—remain unchanged, and the recommendation to trim or avoid exposure at current prices stands. A meaningful thesis shift would require tangible progress, such as securing a binding NPM order or non-dilutive funding, which this news does not provide.