For more than a month, leading names in the Nuclear AI trade have been dormant.
Shares of small modular reactor companies like NuScale Energy (SMR) and Nano Nuclear Energy (NNE) had gone through what is best described as a much needed “healthy correction”.
After declining more than 45% and 30% respectively, both stocks are starting the New Year off with a bang as investors are returning from the holidays in a buying mood.
Let’s take a quick look at each of these companies’ charts and their short- and long-term target prices.
NuScale Power Corp.
For those unaware, NuScale Energy (SMR) specializes in developing advanced small modular reactors (SMRs) for nuclear energy. The company’s SMRs are compact, scalable nuclear power plants designed to provide clean, reliable, and cost-effective energy.
NuScale’s flagship technology, the NuScale Power Module™, delivers carbon-free power generation with enhanced safety features, such as passive cooling systems that operate without external power or human intervention.
The modular design allows for flexible deployment, making it suitable for various applications, including electricity generation for artificial intelligence (AI) applications, desalination, and hydrogen production.
The stock is trading 800% higher over the last year as AI companies like Amazon (AMZN) , Microsoft (MSFT) and Google (GOOG) have all announced programs to use nuclear powered solutions for their AI energy needs.
Since the beginning of December, NuScale’s shares have dropped almost 50%. The move was needed as SMR shares had become extremely overbought following the post-election rally that drove SMR’s price up more than 70%.
NuScale’s shares made an important move today as the stock is crossing back above its 50-day moving average.
The 50-day moving average of any stock is a key technical trendline as it is heavily watched by investors – both retail and institutional – that use technical analysis. A move above or below a stock’s 50-day moving average will increase buying or selling pressure.
Today’s move above SMR’s bullish 50-day moving average puts the stock back on its long-term bull market trend.
Shares are likely to see some resistance at $25 for technical reasons, but a shift above that price will put NuScale Energy’s stock on a trend to hit new all-time highs over the next 4-6 weeks.
From there, expect NuScale Energy shares to head towards a $40 price target, perhaps ahead of the company’s March 13 earnings report.
Long-term, NuScale Energy is considered a buy according to our technically-based models. The stock has a long-term target price of $50 as the AI industry increases their interest in using nuclear power alternatives.
First, simply buy the shares.
At its current price, NuScale possesses the ability to move aggressively towards the $40 price level. Technical traders will become more engaged in the stock given the fact that it is far from being technically overbought and trading back above its 50-day.
Expect some volatility as NuScale is still considered a “Discovery Stock”, but long-term trends should smooth that volatility and result in gains.
Second, Consider a LEAP Option on NuScale
LEAPs are long-dated options that allow investors to leverage long-term trends.
As of today, the LEAPs $25 call options on NuScale Energy that expire on January 16, 2026 trade for $895 per contract.
This means that you can control 100 shares of NuScale Energy stock for $895. This option would be valued at a minimum of $2,000 – a 125% gain - if NuScale hits the $40 target within the next 75 days.
Shares of NuScale themselves will have returned 70% at the same $40 target.
Investors should always ensure that they have the appropriate education and experience when using options in their portfolio.
