Summary:
Oklo's stock downgraded to Hold amid skepticism over its nuclear reactor deployment timelines
Stock remains up 156% this year and 470% over the past 12 months despite recent drop
Company's business model involves building, owning, and operating nuclear plants, an untested regulatory path
First plant deployment targeted for late 2027 or early 2028, but licensing application not yet submitted
Recent $400 million equity raise may not be enough for capital-intensive business model
Oklo, a nuclear startup, has seen its stock soar amid the AI boom's heightened interest in nuclear power. However, Wall Street remains skeptical about the company's ability to meet its ambitious timelines for deploying and commercializing its reactors.
Downgrade Amid Doubts
Craig-Hallum analyst Eric Stine downgraded Oklo's stock from Buy to Hold, despite raising his price target to $59 from $43. The stock responded with a 6.4% drop to $54.25, yet it remains up 156% this year and 470% over the past 12 months.
Uncharted Regulatory Path
Oklo's business model involves building, owning, and operating nuclear power plants, a path no company has yet taken. While recent executive orders aim to kickstart the U.S. nuclear industry, industry checks reveal "various degrees of skepticism" about Oklo's regulatory and commercial timelines.
Lofty Goals and Regulatory Hurdles
The startup aims to deploy its first plant at Idaho National Laboratory by late 2027 or early 2028. However, it has yet to officially apply for licensing with the U.S. Nuclear Regulatory Commission (NRC). An initial draft application was denied in 2022 due to "insufficient technical information."
Funding and Future Prospects
Oklo recently raised $400 million in equity, but Stine expects the company will need more funding given its capital-intensive model. Despite strong demand indicators, such as a tentative agreement to supply power to Eielson Air Force Base, success hinges on timely regulatory approval.
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