Oklo rises as Barclays initiates the stock at “overweight”
Trendy nuclear power stock Oklo received a bullish review from Wall Street on Monday, with Barclays analysts starting coverage of the stock at “overweight” — basically a “buy” rating — alongside a price target of $146, a more than 30% premium to Friday’s close.
The underlying rationale is, of course, the AI data center boom, which is already boosting electricity demand — and raising utility bills — and is projected to do so for years to come.
Shares were up 5.8% premarket. Before today, the stock had soared more than 50% over the past month, but that includes a bit of a retrenchment over the past few sessions.
As a maker of small modular nuclear reactors (SMRs), Oklo and similar companies like Nuscale are seen as providing a possible technology that can bridge the growing gap between supply and projected demand.
But this is all very speculative, as these companies are not actually producing much of anything at the moment besides outstanding stock market returns.
Barclays analysts note that Oklo’s business currently encompasses a series of “non-binding agreements with various customers, such as data centers, military outposts, etc,” and Wall Street forecasts annual losses for the company through 2028.
Barclays analysts write of the shares:
“OKLO is up more than 5x YTD while SMR has more than doubled to ~$38 vs. the S&P, which is up 13%. Market caps are sizeable at $16.5 bn for OKLO and $11 bn for SMR despite having no binding contracts and still awaiting regulatory approvals.
Generally, we think that the macro news, such as policy or trade updates we get from the Administration (which tend to be more positive than not), and headlines around how the world is short power, will be the largest drivers to stock price reaction while announcements for any binding agreements should also act as a positive catalyst.
Negative reactions to the stock will likely come more in the form of company specific news — i.e. timelines slipping, regulatory and/or execution setbacks...
In the near-term, we are inclined to think that we will get more macro news while updates around any execution issues won’t be for several years (especially as neither company has started construction and commencement of operations is still years away).”
“OKLO is up more than 5x YTD while SMR has more than doubled to ~$38 vs. the S&P, which is up 13%. Market caps are sizeable at $16.5 bn for OKLO and $11 bn for SMR despite having no binding contracts and still awaiting regulatory approvals.
Generally, we think that the macro news, such as policy or trade updates we get from the Administration (which tend to be more positive than not), and headlines around how the world is short power, will be the largest drivers to stock price reaction while announcements for any binding agreements should also act as a positive catalyst.
Negative reactions to the stock will likely come more in the form of company specific news — i.e. timelines slipping, regulatory and/or execution setbacks...
In the near-term, we are inclined to think that we will get more macro news while updates around any execution issues won’t be for several years (especially as neither company has started construction and commencement of operations is still years away).”
