Citi initiated coverage on NuScale Power (NYSE:SMR) with a Neutral rating and a $46 price target, recognizing the company's early leadership in modular nuclear technology while cautioning against elevated valuation and execution risk.

NuScale stands out as the first-mover in a sector gaining momentum from surging electricity demand tied to data centers and AI infrastructure. The company’s 77MW small modular reactor design—already approved and uprated—along with key partnerships, a relationship with Fluor (FLR), and lack of reliance on HALEU fuel, position it ahead of rivals.

Despite these advantages, Citi sees significant hurdles ahead. The current share price appears to reflect expectations for nearly 50GW of installed capacity by 2040, leaving limited room for error. While a new customer contract could act as a near-term catalyst, the firm believes attention will soon pivot to project execution and competitive developments as other players secure regulatory approvals.

Overall, Citi views NuScale as a promising player in a high-growth market, but with a risk-reward profile that warrants caution at this stage.