NNE or SMR: Which Nuclear Energy Stock Gets the Buy Call?

Small nuclear reactors are gaining attention as utilities, data-center operators and industrial companies look for reliable, carbon-free electricity. NuScale Power SMR and NANO Nuclear Energy NNE are both trying to benefit from this trend, but they are at different stages. NuScale is further ahead in approvals and supply-chain preparation, while NANO Nuclear is building a broader business around reactors, nuclear fuel and transportation.

The Case for SMR Stock

NuScale’s biggest strength is its advanced regulatory position. Its reactor design has received approval from the U.S. Nuclear Regulatory Commission (“NRC”). NuScale also plans to use standard low-enriched uranium, which is already available commercially.

The company has also spent years preparing its supply chain. NuScale works with more than 60 specialized suppliers and already has agreements with more than half of them. Designs for important reactor parts are well advanced, while some long-lead components are already being produced. This preparation should make it easier to move from planning into actual project construction.

NuScale also has several major commercial opportunities. ENTRA1 Energy, its strategic partner, is in talks with the Tennessee Valley Authority on a possible large U.S. nuclear deployment. In Romania, the RoPower project is being developed around six NuScale Power Modules at a former coal plant. NuScale also ended the second quarter with about $1.9 billion in cash and investments, giving it strong financial support for future deployment.

Another positive is its use of nuclear-focused artificial intelligence tools. An early test showed that these tools could cut the time needed to find engineering information by as much as 80%. That may improve engineering efficiency as projects move forward.

However, NuScale still needs to turn discussions into firm commercial contracts. Second-quarter revenues were only $0.1 million, showing that meaningful reactor sales have not yet started. Its future therefore depends on customer funding, project approvals, manufacturing progress and final agreements.

The Case for NNE Stock

NANO Nuclear is at an earlier stage, but its business model is broader. Its main reactor, the KRONOS MMR, is a 15-megawatt high-temperature gas-cooled microreactor. It is designed to use LEU+ fuel that is available today, while also keeping the option to use HALEU in the future.

The company has made progress with regulators. The NRC has accepted the University of Illinois construction permit application for review. NANO Nuclear expects environmental and safety reviews during 2027, which could allow construction to begin in the second half of that year. The company is targeting first power around 2030.

Its commercial pipeline is also growing. NANO Nuclear signed a non-binding framework with Tillman Digital Gateway that could make it Tillman’s preferred nuclear technology provider. The two companies are targeting at least 2 gigawatts of nuclear capacity by the mid-2030s and 6 gigawatts or more by 2040, mainly for large AI and data-center projects. These targets, however, still depend on final agreements, financing, customers and regulatory approvals.

NANO Nuclear is also trying to build more of the nuclear supply chain inside the company. Its acquisition of Secured Transportation Services added an established nuclear logistics and transportation business. This gives NNE a source of revenue outside reactor development and may reduce its dependence on outside providers. The company ended its fiscal third quarter with about $580 million in liquidity.

Still, NNE faces major development risks. Many of its commercial arrangements are still at an early stage. It must complete licensing, engineering and construction work before its reactors can begin generating meaningful revenues. Costs are also rising as the company spends more on development and regulatory work.

Price Performance

NNE has performed better in 2026. The stock is down 19.8% year to date, compared with a 31.2% decline for SMR. This gives NANO Nuclear the advantage in recent stock performance.

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Valuation

NNE also looks cheaper. It trades at 1.68 times book value on a trailing basis, while NuScale trades at a little above 2 times. Investors are therefore paying a lower book-value multiple for NNE.

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Earnings Estimates

SMR has the greater expected improvement. The Zacks Consensus Estimate calls for a 2026 loss of 64 cents per share, suggesting a 70.5% improvement from 2025.

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NANO Nuclear’s expected fiscal 2026 loss of 80 cents per share implies a 24.5% improvement. Both companies are still expected to report losses.

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Overall, NuScale is further ahead in regulatory approval, supply-chain preparation and cash resources. NNE, however, has better recent stock performance, a lower valuation and a broader business model. With NANO Nuclear carrying a Zacks Rank #2 (Buy), it is better placed at the moment than SMR, which carries a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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