Interest in nuclear power is picking up. Last month, 14 of the world’s banks and financial institutions pledged their support to increase nuclear energy capacity to reach net-zero emissions targets. The pledge comes after more than 20 countries endorsed the Declaration to Triple Nuclear Energy, launched at a summit last year, with the goal of more than tripling worldwide nuclear power capacity by 2050.

Following the news, share prices of several companies in the nuclear power sector surged. One of them was NuScale Power (NYSE: SMR), a company developing small modular reactors (SMRs) that could potentially change how nuclear power is generated. With support for nuclear energy gaining momentum, here’s what the next five years could have in store for NuScale.

Nuclear power generation is back in vogue

Energy demand is only going higher, and renewables aren’t far enough along to help companies and countries meet their net-zero goals by 2050. The robust demand for energy to power artificial intelligence (AI) operations has many big tech companies showing a renewed interest in nuclear power.

Last month, Constellation Energy signed a 20-year power purchase contract with Microsoft to launch the Crane Clean Energy Center and restart Three Mile Island Unit 1, a nuclear plant that closed five years ago.

And Oracle announced it is designing a data center powered by three small nuclear reactors. During the company’s earnings call, chairman Larry Ellison said that AI’s power needs are “crazy” and that the company is looking to secure energy from this next-generation nuclear technology. The details of Oracle’s plans remain unknown, but NuScale Power is currently the only company with a design approved by the Nuclear Regulatory Commission in the United States for its SMRs.

These SMRs are a way to make nuclear energy modular and scalable, to meet the needs of industrial and technology companies. The modular design allows SMRs to be prefabricated in pieces at NuScale’s factory and assembled on-site. Their ability to potentially reduce costs and start-up time is why this technology appeals to many companies with large data centers.

Cost overruns and delays have hurt NuScale

NuScale has had a bumpy ride so far. Last November, the Utah Associated Municipal Power System (UAMPS) terminated its 2015 agreement with the company to build 12 reactor modules to be up and running by 2023.

Initially, the project’s costs were estimated to be around $3 billion. That eventually rose to $9.3 billion, becoming too expensive for UAMPS. As a result, NuScale’s first planned operational SMR was scratched, and the company had to take a $50 million charge.

Looking ahead to the next five years

NuScale has a design approved by the Nuclear Regulatory Commission (NRC) for its 50 MWe modular reactors, but not its current 77 MWe reactors. The company needed to upsize its original design because the economics of its 50 MWe reactors didn’t work.

It has requested a design approval from the NRC for its 77 MWe reactors and expects it by July 2025. However, this isn’t a full certification, which is projected to take another couple of years after that.

Last year, Standard Power, which supplies electricity to advanced data-processing centers, announced plans to develop two facilities in Ohio and Pennsylvania using NuScale’s SMR technology.

NuScale plans to offer 24 units of 77 MWe modules, which will produce 1,848 MWe from both sites. Standard Power doesn’t expect this to be operational by 2029, showing just how far off commercial operations are for SMRs.

NuScale will certainly face heightened competition during that time. According to Andrea Kock, deputy office director for engineering at the Office of Nuclear Reactor Regulation, the NRC expects to receive 25 licensing applications for SMRs and advanced reactors in the next five years.

Is NuScale a buy?

NuScale enjoys a first-mover advantage, being the only company currently with an SDA from the government. However, it still needs to get its larger design approved before it can move forward.

For now, investor sentiment will drive the stock around its accomplishments (or setbacks). For that reason, most investors will want to avoid it until NuScale gets closer to commercial operations, which are still at least five years away at the earliest.

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Courtney Carlsen has positions in Microsoft. The Motley Fool has positions in and recommends Constellation Energy, Microsoft, and Oracle. The Motley Fool recommends NuScale Power and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.