Short sellers have made an estimated $2.1bn betting against three small modular nuclear reactor companies as a sharp reversal in investor enthusiasm has erased billions of dollars from their combined market value, according to data provider S3 Partners.
US-listed NuScale Power, Nano Nuclear and Sam Altman-backed Oklo had surged last year as investors sought to benefit from growing interest in nuclear energy among AI hyperscalers searching for new sources of electricity. Regulatory changes and funding announcements from the Trump administration also helped drive the sector higher.
But the rally has since reversed. A combined $30.3bn has been wiped from the three companies’ market value since their peak in October last year, as investors have become increasingly concerned about their lack of immediate revenue and the lengthy process required to develop and commercialise the technology.
“The stocks were overinflated in price, based on speculation,” said Adam Stein, director of nuclear energy innovation at the Breakthrough Institute, a climate and energy think-tank. He described the sector’s performance last year as a “textbook hype cycle”, typical of companies in an “early pre-consistent revenue phase”.
Small modular reactors, or SMRs, are designed to be assembled from modules manufactured in factories in an effort to reduce construction time and costs. They generally produce around 300MW or less, compared with more than 1,000MW from traditional reactors. Only two commercial SMRs are currently operable, in Russia and China, while more than 80 designs are at various stages of development.
Investor appetite for the sector is expected to face another test in the coming weeks, when Holtec International and Westinghouse, two US companies with SMR divisions, are expected to list.
Short sellers have increased their bets on the view that the shares reached unsustainable valuations, supported by a limited supply of publicly traded stocks and investor focus on potential demand from AI rather than the capital expenditure and time required to bring reactors into commercial operation.
“On the one hand there was some support from the government, and no one wants to bet against Trump, and on the other there was this whole AI [demand] story which everyone was really bullish about [last year],” said Christian Putz, founder and chief executive of investment firm ARR Investment Partners, who previously shorted Oklo but has since unwound that position.
About 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.
X-energy has also lost $5.8bn in market value since the surge that followed its initial public offering in April. Short sellers have earned an estimated $67mn from bets against the company since mid-May, according to S3 Partners. X-energy, backed by Amazon and Ken Griffin, has yet to receive full regulatory approval to build its helium-cooled reactor, while 9 per cent of its shares are out on loan.
“The sentiment has changed this year, people are far more critical,” Putz said. The companies “have almost zero revenue for the foreseeable future and, on top of that, there are very high capex [capital expenditure] requirements”.
The longer-term demand case for nuclear power remains significant. US data centre power demand is forecast by BloombergNEF to rise from 34.7GW in 2024 to 106GW by 2035, driven partly by the rapid expansion of energy-intensive AI data centres. Big Tech companies are increasingly exploring SMRs as a potential source of future power. In January, Meta agreed a deal with Oklo and Bill Gates-backed TerraPower that included an upfront cash injection to support development of reactor technology.
The Trump administration has also strongly backed the nuclear sector, pledging to reduce regulatory barriers and invest tens of billions of dollars in new reactors and the reopening of existing facilities to generate electricity needed to “win” the global AI race. In June, the Department of Energy announced $17.5bn in loans to help rebuild the US nuclear supply chain.
Yet significant technical, regulatory and financing hurdles remain. Analysts at BNP Paribas have raised concerns about shortages of high-assay low-enriched uranium, a specialised nuclear fuel required by SMRs. Stein said the earliest some reactors could come online would be mid-to-late 2028, if manufacturers accelerate delivery while satisfying regulators, although most are expected during the 2030s.
The financial position of several companies highlights the challenge. NuScale reported a $96.7mn loss in the first half of 2026 and faces a shareholder class-action lawsuit alleging it misled investors, to which it must respond by September 8. Nano Nuclear, whose microreactors remain in development, has never generated revenue and recorded a $14mn operating loss in the first quarter of the year.
Oklo aims to supply commercial power through its liquid-sodium Aurora reactors and expects commercial operation to begin in 2028, although it has yet to secure a full licence from the US nuclear regulator to build and operate the reactor. US energy secretary Chris Wright was previously a board member.
“What we have seen in 2025 seems to me like an industry bubble that is already deflating,” said Siegfried Eggert, chief executive of activist short seller Grizzly Research, who has no short positions against the companies.
“I believe most knowledgeable investors understood for a while that the valuations seemed rather extended given the timeline of this industry,” he added.
Nano Nuclear rejected the “hype cycle” characterisation, saying share-price movements said little about the success of the underlying business. Oklo said it had made “tangible progress” over the past year and expected commercial operation of its Aurora reactor to begin in 2028. NuScale declined to comment, while X-energy did not respond to a request for comment.
