Key insights
- Citi analysts highlight opportunities in the nuclear sector, favoring upstream supply chain exposure due to Small Modular Reactor (SMR) development. While existing owners are hesitant on cost overrun risk, SMRs are projected to contribute significantly to US power supply by the early 2030s. Citi is most constructive on Centrus Energy for its upstream position, which benefits regardless of specific SMR technology success. The analysis suggests limited near-term dealmaking for existing plants but notes positive progress on restarts and potential benefits for NextEra Energy's SMR efforts from recent acquisitions.
Investing.com -- Citi analysts have identified key investment opportunities in the nuclear sector, favoring upstream supply chain exposure as the industry navigates the evolving landscape of small modular reactor development and existing plant operations.
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The firm noted that prospects for hyperscaler deals with existing nuclear generation remain relatively limited due to political concerns, though uprates appear to be gaining traction. Citi’s proprietary foot traffic tracker indicates that restarts are proceeding well but does not show signs of near-term dealmaking at any plant.
Regarding NextEra Energy’s recent acquisition, Citi expressed less concern about the Nuclear Regulatory Commission process despite potential concentration risk, suggesting the additional sites may benefit the company’s SMR development efforts.
Existing nuclear owners are staying on the sidelines of new nuclear development because they are unwilling to take cost overrun risk, according to the analysis. While a few companies continue to execute on SMR projects, progress initially will be understandably slow.
Citi expects SMRs will become a meaningful contributor to U.S. power supply in the early 2030s. Given the large and evolving pipeline of more than 100 designs, the firm currently favors upstream nuclear supply chain exposure, which should benefit regardless of eventual technology winners.
- Centrus Energy Corp. - Citi is most constructive on Centrus within its coverage universe. The firm’s preference for upstream nuclear supply chain exposure positions Centrus favorably as the company stands to benefit irrespective of which SMR technologies ultimately succeed in the market.
Centrus Energy Corp. reported first-quarter 2026 results that missed analyst forecasts for both revenue and earnings per share.
- NuScale Power Corp. - Despite ongoing execution in the SMR space, Citi is least constructive on NuScale among the nuclear stocks in its coverage. The firm acknowledges the company’s continued progress but appears more cautious on its near-term prospects compared to upstream supply chain players.
In recent news, NuScale Power Corporation’s first-quarter 2026 earnings report showed revenue that was significantly below expectations. The company also saw BofA Securities initiate coverage with a Neutral rating.
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