X-Energy Has Amazon as an Anchor Customer and Went Public in April. Is It a Better SMR Stock Than Oklo?

Small modular reactors (SMRs) could change how nuclear energy is produced by shifting from custom-built nuclear power plants to factory-built, modular units. Two companies to watch in this space are X-Energy (NASDAQ: XE) and Oklo (NYSE: OKLO). Both develop SMR technology but use different designs and are at different stages in regulatory approvals and commercial agreements.

X-Energy stands out thanks to its anchor customer and early investor, Amazon, which has helped the company hit the ground running by funding early stage engineering, licensing, and permitting, and helping it secure commercial deals. For investors considering these two SMR stocks, the key question is whether Amazon's backing gives X-Energy an edge over Oklo.

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Amazon is a major shareholder in X-Energy

Developing next-generation nuclear technology is no easy feat, and Amazon's early support for X-Energy is central to the company's investment thesis. In October 2024, Amazon led a $700 million Series C-1 funding round for X-Energy to further develop its reactor design, secure licensing, and fund the first phase of its fuel fabrication facility in Oak Ridge, Tennessee.

Amazon holds nearly 66 million shares in X-Energy, or roughly 23% of X-Energy's total shares outstanding. This gives Amazon significant voting power and a vested interest in X-Energy's success. As part of this deal, Amazon and X-Energy aim to deploy 5 gigawatts (GW) of SMRs across the U.S. by 2039.

X-Energy is further ahead in NRC regulatory reviews

Thanks to this financial assistance from Amazon, X-Energy is further along in both regulatory reviews and commercial agreements than Oklo. The Nuclear Regulatory Commission has accepted X-Energy's flagship project with Dow's formal Construction Permit Application, completed its Environmental Assessment, and advanced toward its final Safety Evaluation milestones.

Oklo, in comparison, had its initial Combined License Application (COLA) for its Aurora powerhouse design at Idaho National Laboratory denied in January 2022 due to insufficient technical and safety information. It is in pre-application engagement with the NRC, but is looking to advance this project through the Department of Energy's authorization pathway.

X-Energy has more firm customer commitments thanks to Amazon's support

X-Energy also holds an edge in commercial agreements. The company's first project with Dow will deploy four units of X-Energy's 80-megawatt (MW) Xe-100 high-temperature gas-cooled SMR at its UCC Seadrift Operations manufacturing site in Texas. As noted above, the company is working through regulatory approvals and hopes to have full construction approval by the first quarter next year.

In addition, X-Energy has early stage agreements with American Electric Power and Energy Northwest. With AEP, it will look to deploy 12 reactors, with Amazon providing milestone-based development capital and a long-term power purchase agreement to cover all facility costs. For its Energy Northwest deal, X-Energy aims to deploy 12 reactors, with Amazon funding the first four units as the offtake customer.

In comparison, Oklo has a larger 14 GW pipeline and agreements with Meta Platforms, Equinix, and Switch. However, most of this pipeline (12 GW) is tied to Switch, and the agreement remains non-binding. The company hopes to deploy its Aurora Powerhouse at Idaho National Laboratory in 2028 as part of a pilot program. However, to sell power commercially, the company must still achieve NRC licensing.

X-Energy is a better buy than Oklo -- but there's a catch

Oklo is pursuing alternative pathways to get its Aurora powerhouses operational and could do so before X-Energy. However, X-Energy has significant backing from Amazon, which has helped it navigate the challenging NRC licensing and approval process.

That said, SMRs and microreactor technology are still in their early stages, and companies are only now laying the groundwork to deploy them commercially in the 2030s. While X-Energy has an early advantage, investors today still face execution and deployment risks, making investments in SMR stocks a very high-risk bet on the future of nuclear energy.

Courtney Carlsen has positions in Meta Platforms and Oklo. The Motley Fool has positions in and recommends Amazon, Equinix, and Meta Platforms. The Motley Fool has a disclosure policy.