Short sellers have reaped massive profits from betting against small modular nuclear reactor companies, pocketing an estimated $2.1 billion as the so-called hype cycle that once sent these stocks soaring has collapsed.
Data from S3 Partners shows that funds made their money shorting three stocks in particular: United States-listed NuScale Power, Nano Nuclear, and Sam Altman-backed Oklo over the past year. A total of $30.3 billion has been wiped off their collective market value since the peak in October last year, amid growing concerns over the lack of immediate revenue and the long build-out timelines for the technology.
NuScale Faces Legal and Financial Pressure
NuScale, which reported a US$96.7 million loss in the first half of 2026, now faces a shareholder class-action lawsuit alleging it misled investors, to which it must respond by September 8. The company’s stock dropped to a 52-week low of $7.52 as investors questioned the lengthy regulatory and construction timelines associated with small modular reactors. Truist initiated coverage on NuScale with a Hold rating and a $10 price target, noting growing enthusiasm for nuclear energy while cautioning that successful project delivery will determine which developers ultimately emerge as industry leaders.
Short interest remains elevated across the sector. Around 18 per cent of Oklo and NuScale’s outstanding shares remain out on loan, a proxy for short selling, while almost 30 per cent of Nano Nuclear’s shares are on loan, according to S&P Global Market Intelligence data.
SMR Sector Faces Reckoning After Valuation Surge
The selloff represents a sharp reversal from the exuberance that gripped the SMR sector in late 2025, when investor enthusiasm for nuclear energy’s potential to power artificial intelligence data centres sent valuations soaring. Small modular reactors, designed to be factory-built and deployed faster than traditional nuclear plants, were positioned as a key part of the clean energy transition.
However, the reality of long regulatory timelines, high capital costs, and limited near-term revenue streams has set in. The sector now faces a critical test in the coming weeks, when Holtec International and Westinghouse, two U.S.-based companies with SMR divisions, are expected to pursue public listings that will gauge continued investor appetite.
The broader nuclear energy industry continues to see policy support, with the U.S. Department of Energy advancing its Reactor Pilot Program and several advanced reactor projects reaching milestones in 2026. Yet the gap between policy ambitions and commercial readiness remains a challenge for publicly traded SMR developers trying to justify their valuations.
Sources: Financial Times; S3 Partners; S&P Global Market Intelligence; Truist Securities; Financial Post
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