Oklo's Nuclear Lead Widens As Analyst Highlights Regulatory Edge, Hyperscaler Demand
News Summary
Needham analyst Sean Milligan initiated coverage on Oklo with a Buy rating and a $135 price target, highlighting the company's leading position in advanced nuclear. This is attributed to its regulatory head start, diversified fuel strategy, and increasing demand from hyperscalers. Milligan noted Oklo's momentum under the Department of Energy (DOE) Reactor Pilot Program, which allows construction of the Aurora-INL project to commence before full Nuclear Regulatory Commission (NRC) licensing. The company boasts the most diversified fuel strategy in advanced nuclear, utilizing DOE-supplied EBR-II material, plutonium, and high-assay low-enriched uranium (HALEU) from partners like Centrus and Hexium. The Tennessee Advanced Fuel Center is set to enable large-scale metallic fuel recycling and fabrication. Commercially, Oklo has garnered over 14 GW of customer interest, including a 12 GW master agreement with Switch and a 500 MW letter of intent with Equinix, backed by a $25 million prepayment. Milligan emphasized that converting these nonbinding agreements into power purchase agreements (PPAs) is a critical near-term catalyst. He also cited supportive federal policies, including Executive Order 14299 and expanded tax credits, which enhance the deployment outlook. Oklo maintains strong liquidity of approximately $1.2 billion as of Q3 2025, sufficient to fund its projects and fuel fabrication without immediate equity needs.
Background
Oklo Inc. is a company focused on developing and deploying advanced nuclear technology, specifically designing, building, and operating next-generation small modular reactors (SMRs). Its fast-reactor design allows for the use of diverse fuel types, including recycled nuclear waste. The U.S. government, particularly through Department of Energy (DOE) programs, actively supports the development of advanced nuclear technologies to achieve energy independence and carbon reduction goals. The DOE Reactor Pilot Program provides an accelerated pathway for new nuclear reactor construction, allowing projects to commence some construction activities before receiving full Nuclear Regulatory Commission (NRC) licensing, thereby shortening deployment timelines. Simultaneously, the surge in demand for stable, carbon-free power from hyperscale data center operators is driving commercial interest in clean energy solutions like nuclear power.
In-Depth AI Insights
To what extent is Oklo's regulatory advantage sustainable and replicable, especially within the current Trump administration's regulatory framework? - Oklo's ability to commence construction under the DOE Reactor Pilot Program before full NRC licensing indeed grants it a significant first-mover advantage. However, the long-term sustainability of this