Don't Buy Oklo Stock Until This Catalyst Hits
Key Points
Oklo already has an impressive customer pipeline.
Real-world adoption of SMR technology remains elusive.
- 10 stocks we like better than Oklo ›
Oklo (NYSE: OKLO) specializes in small modular reactors, or SMRs. SMRs are essentially miniature nuclear power plants that can be built more quickly and at lower upfront costs than traditionally sized nuclear facilities.
The concept of SMRs has been around for decades. Yet only two SMR systems have ever been built. That's because on a per-megawatt basis, SMRs are more expensive than larger nuclear systems. The main advantage has been the speed of construction, which historically hasn't been highly valued.
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Speed, however, is now in high demand as AI companies race to build more energy-intensive data center infrastructure. Yet Oklo's stock price has fallen nearly 50% since 2026 began. That's because markets aren't yet confident that the company's impressive customer pipeline will ever convert into real-world projects. That's why I'm waiting for an upcoming catalyst before jumping into this beleaguered nuclear stock.
This catalyst could kick-start SMR momentum
If Oklo's share price weakness is a reflection of market skepticism over SMR adoption, an upcoming catalyst from SMR competitor NuScale Power (NYSE: SMR) could reverse negative sentiment. NuScale has a non-binding deal with a major U.S. utility to build the largest SMR system in the world. No financial commitments have been made, however. That could change by the end of this year, when NuScale's CFO predicts a binding power purchase agreement could be forged.
Oklo's long-term future will still be reliant on its ability to secure regulatory approvals, convert its customer pipeline into revenue-generating projects, and execute these deals on time and on budget. If NuScale is able to secure financial commitments from its biggest partner, however, expect a surge of bullish sentiment to flow through the entire SMR sector. Investors may have to buy Oklo at a higher price, but they can be much more confident in the viability of SMR technology in general, and thus Oklo's long-term business strategy.
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Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool recommends NuScale Power. The Motley Fool has a disclosure policy.
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