Oklo shares gained another 17% on Thursday afternoon following news of a partnership with data center provider Switch.
Founded in 2013 and backed by Sam Altman, Oklo aims to deliver its first small modular reactor (SMR) by 2027. The company’s flagship design, the Aurora, is a 15-megawatt passive compact fast microreactor that runs on High-Assay Low-Enriched Uranium (HALEU), a fuel noted for its efficiency and waste-reducing capabilities.
The Aurora reactor is scalable to 50MW and 100MW designs, with each reactor capable of operating for over a decade before requiring refueling.
Oklo’s 20-year agreement for its nuclear powerhouses to provide 12 gigawatts of power to Switch's data centers was described as a "framework for collaboration” by both companies, and Oklo CEO Jacob DeWitte said the partnership will accelerate the deployment of its powerhouses and demonstrate long-term customer demand.
Wedbush analysts have initiated coverage of the Santa Clara-based SMR manufacturer with an ‘Outperform’ rating and a $26 price target, citing the company’s differentiated business model and strong momentum leading into 2025.
Wedbush highlighted Oklo’s unique "build, own, and operate" business model, which involves selling power directly to customers under long-term contracts rather than selling reactors. This model streamlines regulatory challenges and offers the potential for stable, recurring revenue.
But it is Oklo’s leadership that has caught the eye of analysts.
“While the market remains competitive and currently represents an arms race in terms of the approval process and timelines to get power to the ground, we do believe Oklo is a step ahead of the competition with its planned deployment and backed by a major player in the AI space, Sam Altman,” analysts wrote.
“We believe data centers will represent a massive opportunity in the SMR space over the next decade as the amount of energy needed to create, store, and compute is exponentially growing as our technological world further develops.”
Oklo’s project pipeline is currently 93% filled ahead of its 2027 deployment target, with data centers accounting for nearly half of its committed 1,350 megawatts of power under letters of intent. Analysts pointed to the growing demand for clean energy to power artificial intelligence initiatives as a key growth driver for Oklo. Computing power requirements for AI are expected to increase tenfold by 2030.
Oklo has also made progress in its regulatory process, maintaining a relationship with the Nuclear Regulatory Commission (NRC) since 2016. The Department of Energy has approved the safety design strategy for its Aurora fuel fabrication facility.
The company plans to expand its offerings with 15MW, 50MW, and 100MW reactors tailored to meet varying power needs. Wedbush noted that Oklo is well-positioned to attract customers interested in nuclear power while mitigating traditional investment barriers.