Fluor Stock: Is the Construction Play Worth Your Long-Term Portfolio?

The Cyclical Nature of Construction: Understanding Fluor’s Core Challenge

Fluor Corporation (NYSE: FLR) operates in the engineering and construction sector, a space where volatility comes with the territory. The company undertakes large-scale infrastructure projects—think power plants, office complexes, and transportation networks—on behalf of both corporate clients and government entities. While Fluor has built an impressive reputation for execution, the fundamental challenge remains unchanged: construction demand mirrors broader economic cycles.

Historically, Fluor relied heavily on fixed-price contracts, a model that created significant financial exposure. When project costs ran below contract estimates, the company pocketed the difference. When overruns occurred, Fluor absorbed the losses. This dynamic produced an unpredictable earnings trajectory and kept investors on edge.

A Strategic Pivot Toward Stability

Recognizing the need for more predictable cash flows, Fluor has undergone a meaningful business transformation. Today, 82% of its $28.2 billion backlog consists of reimbursable contracts—a structure where clients bear cost overruns and the company earns fees on a variable basis. This shift reduces downside risk and smooths reported earnings.

The strategy is working, and Wall Street has taken notice. However, a critical reality persists: construction itself remains inherently cyclical. Economic expansions drive building activity; recessions freeze projects or cancel them outright. No contract structure eliminates this underlying volatility. Even with improved visibility, Fluor shareholders should expect significant stock price fluctuations tied to macroeconomic conditions.

The NuScale Power Wildcard: Promise and Uncertainty

What truly captures investor imagination is Fluor’s ownership stake in NuScale Power (NYSE: SMR), a company pioneering small modular nuclear reactors. This isn’t a purely philanthropic venture—Fluor expects to win construction contracts once NuScale commercializes its technology.

The two companies are collaborating on a Romanian power plant project, which would represent NuScale’s inaugural commercial deployment. However, complications arise. The final investment decision won’t materialize until late 2026 or early 2027, pushing timelines further into the future. Meanwhile, NuScale remains unprofitable, burning cash while betting on nuclear energy’s resurgence.

Stock volatility tells the full story. In October 2025, Fluor sold a portion of its NuScale holding for $605 million—a transaction that occurred near a price peak. Since that high point, NuScale shares have plummeted 70%. Fluor plans to liquidate the remainder of its stake by mid-2026, but the ultimate proceeds remain highly uncertain, hinging entirely on market sentiment toward nuclear innovation.

The NuScale opportunity carries genuine upside potential. Yet it remains a one-time liquidity event rather than an ongoing earnings driver, so it cannot serve as a foundation for building lifetime wealth.

Who Should Consider Fluor Stock?

The company operates a fundamentally sound business model. Its engineering expertise and project management capabilities are genuinely competitive. But consistency is not a defining characteristic of construction companies, and Fluor is no exception.

The sector’s inherent cyclicality means that long-term stability for shareholders remains elusive. Investors seeking calm, predictable returns from their equity holdings should look elsewhere. Only those with a genuine appetite for volatility—and the financial capacity to weather significant drawdowns—should seriously evaluate Fluor as a portfolio holding.

The NuScale stake adds an interesting dimension but doesn’t materially improve the risk profile for most investors.

The Bottom Line

Fluor stock might appeal to a narrow band of risk-tolerant investors, particularly those betting on infrastructure spending cycles. For most, however, the company’s inherent unpredictability makes it a challenging long-term holding. The business remains worthy of respect, but the company itself is unlikely to be the wealth-building vehicle many investors are seeking.