While shares of NuScale Power and other developers of small modular reactors are floundering after seeing triple-digit gains this year, some analysts believe they can still power ahead.

NuScale ended Tuesday’s session down 13% at $37.38. It was the fourth consecutive losing session, but the stock remains up 114% this year. Industry peer Oklo, which has risen 557% this year on enthusiasm about the potential for small reactors to help supply the power needed for the artificial-intelligence boom, closed down 12%.

Some on Wall Street expect the losses to continue. BNP Paribas Exane analyst Moses Sutton downgraded NuScale to Underperform from Neutral with a $25 price target, down from $41, in a research note Tuesday.

The valuation of stocks like NuScale, an unprofitable company that has generated little revenue, “is often completely detached from fundamentals,” Sutton wrote. He described the enthusiasm around names like NuScale and Fluence Energy as “meme-ish crazes,” saying energy companies that tout long-term exposure to data centers “are garnering AI basket multiples.”

Sutton wasn’t the only one to cut his rating on the shares. Citi Research downgraded the stock to Sell from Neutral and trimmed its target for the price to $37.50 from $46 in a note Monday. The lower price target reflects an adjusted forecast for the amount of reactors expected to be installed through 2040. The bank reduced its call to 16 gigawatts of generation capacity from 20 gigawatts.

In addition to NuScale’s “stretched valuation,” analysts cited the potential of further sales by Fluor, the company’s major stakeholder, which unloaded 2.5 million shares last month.

Moreover, a contract with the Tennessee Valley Authority, a government-owned utility that sells power in several states, is unlikely in the near to medium term, the analysts said.

The analysts noted that NuScale was aiming to secure one customer agreement by the end of 2025, likely with TVA.

Last month, the developer ENTRA1 Energy signed a nonbinding agreement with the TVA for a potential power-purchase agreement covering NuScale’s power-module units. But for NuScale to benefit, it would still need to secure an agreement to supply its modules.

“Based on our conversations, TVA has indicated that they remain in early stages and finalization could take years, with no guarantee of completion,” the analysts wrote.

Other firms were more enthusiastic. In a research note Tuesday, Cantor Fitzgerald analyst Derek Soderberg initiated coverage on NuScale stock, rating it at Buy with a $55 price target.

NuScale is the only company to earn Nuclear Regulatory Commission approval for its small modular-reactor designs, the analyst pointed out. Peer Oklo, for example, is still awaiting full approval.

The reactor design itself is a selling point. While it is up for debate whether SMRs are actually safer than traditional reactors, considering studies that suggest they produce more nuclear waste, they have nonetheless emerged as a popular take on the technology due to their built-in safety features.

NuScale, in particular, “pioneered and miniaturized industry-standard light-water reactor technology,” which in turn lowers the bar for the use of the smaller plants in the future, Soderberg wrote.

The design of NuScale’s modules—the basic components of its reactors—creates an opportunity in the data-center market, because they can be used together to meet the demand for hundreds of megawatts of power.

Industry trends are also supportive. Over the last decade, electrical demand has been relatively flat, but this is changing. Soderberg cited data from the International Atomic Energy Agency and the Department of Energy, which forecast grid power demand to grow at a 4% compound annual growth rate through 2030, driven by electric vehicles and data centers.

“While a 4.0% CAGR sounds small, in relation to the current size of the US grid, this expansion represents hundreds of billions of dollars of energy investment over the next five years,” Soderberg wrote. In his view, NuScale is positioned to capitalize on the coming “multi-trillion-dollar energy transition.”