Forget NuScale's Quarterly Numbers: Its TVA Deal Could Be the Biggest Nuclear Contract in U.S. History.

Over the coming decades, nuclear energy will be a $10 trillion opportunity. That's according to Bank of America analysts, who are particularly excited about a relatively novel method of producing nuclear power: small modular reactors, or SMRs.

"Amid surging electricity demand, driven in part by the rise in AI/data centers, nuclear energy offers a potential solution," Bank of America concluded in a recent report. "And new advancements in technology may now make the tipping point in sight for small modular reactors (SMRs) to reshape nuclear energy supply chains over the next decade."

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NuScale Power (NYSE: SMR) is currently the only company in the U.S. approved by regulators to build an SMR system. On a recent call with investors, CEO John Hopkins stressed that the company remains "the only SMR company in the world to have earned U.S. Nuclear Regulatory Commission standard design approval," adding that it has "done it for two separate designs, our 50-megawatt and our 77-megawatt modules."

Many other companies are currently working through the approval process for SMRs. But NuScale has leveraged its early approvals to secure large deals, including a 6-gigawatt project for the Tennessee Valley Authority (TVA). If built, that system would be the largest SMR facility in the world by a large margin.

NuScale's second-quarter numbers are already in the books, and it's expected to report Q3 earnings on Nov. 5. Only one detail will likely matter from that announcement: Has a power purchase agreement (PPA) been signed with the TVA?

A power purchase agreement would essentially lock the TVA into buying power from the project. This financial commitment would allow NuScale to begin construction.

It's hard to understate how significant a PPA would be for NuScale's business model and stock price. Right now, the market seems skeptical that the TVA project will ever move forward, and NuScale's struggling stock price and market cap under $4 billion reflect that.

To gauge how much shares could spike with a signed PPA, it's important to consider NuScale's history of failed projects.

NuScale investors must remember this failed nuclear energy project

NuScale has signed major customers before, only to see them cancel the projects before major financial commitments were made firm.