Is Fluor Stock a Safe Long-Term Bet? The Reality Behind FLR's Recent Shifts

The Problem With Fluor’s Core Business Model

Fluor Corporation (NYSE: FLR) is one of the world’s most respected engineering and construction firms. Governments and corporations turn to them when massive infrastructure projects need to be built—power plants, manufacturing facilities, transportation networks. The company’s track record is solid, but there’s a fundamental challenge that investors need to understand.

Construction projects are inherently cyclical. When economic times are strong, capital projects flourish. During recessions, funding dries up and projects get shelved. This reality means that even a well-managed company like Fluor faces unavoidable volatility in its cash flows and earnings.

How Fluor Is Trying to Reduce Business Volatility

Recognizing this structural issue, Fluor made a strategic pivot. The company historically relied on fixed-price contracts, which exposed it to massive financial risk. If construction costs exceeded the bid price, Fluor absorbed the losses. If costs came in lower, the company kept the surplus. This created wild swings in profitability.

Today, the situation looks markedly different. According to the company’s latest financial disclosures, approximately 82% of Fluor’s $28.2 billion backlog now consists of reimbursable contracts. This shift is significant. Under reimbursable arrangements, Fluor gets paid for actual costs incurred plus a management fee, substantially reducing downside risk.

However—and this is crucial—changing contract structures doesn’t eliminate the cyclicality built into the construction industry itself. Even with a more predictable revenue stream, Fluor remains vulnerable to broader economic downturns that reduce overall project demand.

The NuScale Power Wildcard: Opportunity or Distraction?

What has captured investor attention recently is Fluor’s early-stage investment in NuScale Power (NYSE: SMR), a startup developing small modular nuclear reactors (SMRs). The logic behind Fluor’s involvement is straightforward: if NuScale’s technology gains traction, Fluor stands to win lucrative construction contracts to build these new-generation power plants.

This isn’t charity. It’s strategic positioning. Fluor and NuScale are currently collaborating on an early-stage power plant project in Romania that could represent NuScale’s first commercial deployment. However, the final investment decision on that project won’t come until late 2026 or early 2027—later than originally anticipated.

The current reality: NuScale Power remains unprofitable and highly speculative. Its stock price reflects this uncertainty, swinging dramatically based on regulatory developments and market sentiment around nuclear energy.

What’s Fluor’s NuScale Position Actually Worth?

In October 2025, Fluor sold a portion of its NuScale stake, raising $605 million. The company negotiated a deal for the remainder of its holdings to be divested by mid-2026. On paper, this represents a potential windfall.

The problem: NuScale’s stock has lost approximately 70% from its October high. Without knowing where the stock will trade when Fluor executes its remaining sales, estimating the value of this position is nearly impossible. The NuScale stake could provide meaningful returns or significant disappointment—entirely dependent on Wall Street’s appetite for nuclear energy stocks and the pace of regulatory approvals.

More fundamentally, this is a one-time liquidity event. Even if Fluor realizes substantial proceeds, it won’t fundamentally alter the company’s long-term earnings profile or create the kind of stable, compounding returns that build wealth over decades.

The Bottom Line: Fluor Demands Caution

Fluor is undeniably a quality company with excellent market positioning and strong expertise. The shift toward reimbursable contracts represents genuine operational progress. The NuScale investment adds an intriguing asymmetric upside element.

Yet none of this changes the fundamental reality: Fluor operates in a cyclical industry. Its earnings will fluctuate. Its stock price will experience significant volatility. For investors seeking stability and predictable long-term returns, Fluor presents challenges.

The stock may appeal to investors with high risk tolerance who understand and accept that their holdings could experience substantial price swings. For conservative investors hoping to build wealth steadily over time, there are likely more suitable alternatives that combine growth potential with greater earnings predictability.