Investors love a story, and Oklo (NYSE: OKLO) has one of the punchiest on Wall Street.
The California-based start-up, valued at $18bn, is pitching a future of pocket-sized nuclear power stations — called small modular reactors — that could light up data centres and factories from the late 2020s onwards.
Goldman Sachs this week initiated coverage with a neutral rating, setting a $117 price target. That implies roughly 11% downside from the current $131 share price, a polite way of saying the stock already discounts a lot of optimism.
The numbers are stark. Oklo has booked no revenue and is forecast to remain loss-making well into the next decade.
Its Aurora Powerhouse, a sodium-cooled reactor designed to run on enriched uranium, is still waiting for regulatory clearance. The company expects to submit a licence application later this year, with approval unlikely before 2028.
Still, Oklo has built one of the largest order pipelines among its peers, with more than 14 gigawatts of potential deals. Customers include data centre operators desperate for clean, round-the-clock power.
One early partner, Equinix, has even stumped up a $25m prepayment. But most agreements are non-binding letters of intent rather than firm contracts.
Goldman highlights two key hurdles. First, Oklo’s decision to build, own and operate its reactors rather than simply sell the technology.
That gives it control, but also saddles it with the bill. Analysts reckon the company will need to raise about $14bn through the 2040s before it can generate sustainable free cash flow.
Second, fuel. Oklo’s design relies on high-assay low-enriched uranium, or HALEU, a type of nuclear fuel in short supply outside Russia and China. Oklo has a three-pronged plan to secure feedstock, including recycling weapons-grade uranium and nuclear waste, but scaling up will take years.
For now, Oklo trades more like a call option on the future of nuclear than a business with cash flows.
That can work for investors who like their bets long-dated and catalyst-driven: a regulatory approval here, a binding power contract there. But with shares up more than 1,400% over the past year, plenty of that excitement already seems priced in.