The small modular reactor sector has recently become quite interesting. The main manufacturer’s stock price surged over 8% in one go, reaching $21.28.

What’s the reason? Investment banks have adjusted their outlook. The previous "underperforming the market" rating has been changed to "Neutral." The logic is straightforward—since the stock has already fallen nearly 60% from its high, at this level, the risk-reward profile is relatively balanced. However, the bank is not overly optimistic, lowering the target price from $34 to $28, mainly due to concerns about the company's recent cash flow pressures and potential equity dilution.

Interestingly, although the target price has been adjusted, the bank has not changed its long-term outlook on small modular reactors—it remains optimistic. This also explains why the stock price reacted so quickly. Since the beginning of the year, this stock has already gained about 50%, and from the bottom, it has more than doubled. The market is clearly digesting two expectations: short-term financing risks and long-term technological prospects.