NuScale Power (SMR), a company developing small modular nuclear reactors, saw its stock plummet 5.09% during Thursday's trading session. This significant drop comes amidst growing concerns about overvaluation in the energy sector, particularly among companies riding the artificial intelligence (AI) excitement wave.

The sharp decline in NuScale's stock price appears to be part of a broader reassessment of energy stocks that have seen substantial gains this year without generating current revenue or near-term profitability. NuScale Power, which has surged 155% year-to-date, is now facing investor scrutiny as the market begins to question the sustainability of such valuations.

Analysts point out that NuScale Power, while earning some engineering and licensing fees for a project in Romania, is not expected to turn a profit until 2030. This long timeline to profitability, coupled with the general frothiness in AI-adjacent energy stocks, may have prompted investors to take a step back and reevaluate their positions. The company's current market capitalization, which had ballooned on AI-related optimism, now seems to be adjusting to reflect the risks and uncertainties associated with its long-term business model.