Prediction: This $60 Nuclear Stock Will Outperform the S&P 500 This Year

Nuclear power plant upstart Oklo (NYSE: OKLO) is off to a slow start in 2026. Its shares are down more than 18% year to date compared to a decline of about 3% for the S&P 500. There are several scenarios, however, in which Oklo's shares could outperform the S&P 500 this year.

Oklo's Aurora powerhouses are small modular reactors (SMRs) that use recycled nuclear fuel and are designed to operate for up to 10 years before needing refueling. Demand for nuclear power is growing, thanks both to President Donald Trump's emphasis on the technology and the nation's rising power needs, which are largely being driven by the rapid buildout of electricity-hungry artificial intelligence data centers.

There are good reasons why investors may be wary about the stock. Oklo is a pre-revenue company, and as such, its volatility is through the roof. Its shares have ranged over the past two years between $17.42 and $193.84. However, here are four reasons why Oklo should outperform the S&P 500 this year.

It should add more contracts to its deal with Meta

On Jan. 9, Meta Platforms signed a deal with Oklo under which the tech giant will support the smaller company's effort to deploy a 1.2 gigawatt (GW) power campus in Pike County, Ohio. That campus will generate power for Meta's data centers in the region. By prepaying for that power, Meta will fund the project's progress. The day the deal was announced, Oklo's shares jumped by nearly $8 to close at $105.31.

Oklo has an 18 GW pipeline. If it can sign additional deals with hyperscalers or similar partners, analysts' and investors' opinions of the stock would rise considerably.

One possible customer is Oracle, which has stated its desire to build data center campuses with space for small nuclear reactors on site. Oracle's Stargate collaboration with OpenAI in Texas will require ample gigawatts, and Oklo's Aurora powerhouse would be a logical choice for the behind-the-meter SMR deployment Oracle would prefer. Oracle recently disputed reports that the project was stalled, but even if it is, Meta has shown an interest in stepping in and using the data center, and it already has a relationship with Oklo.

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It is in a strong financial position

Oklo's war chest is quite impressive for a company that is currently pre-revenue. Its financial strategy has shifted from a lean start-up to a well-capitalized industrial player, largely thanks to successful capital raises throughout 2025, with a secondary public offering in June and an ATM equity program it rolled out in December.

The company ended the third quarter with $1.2 billion in cash and marketable securities on its books. It also has little long-term debt, which gives it a big advantage over its competitors in the current higher-interest-rate environment.

Based on management's guidance for an annual operating cash burn of $65 million to $80 million, the company has more than 10 years of runway if its spending remains stable. Now, Oklo will likely start to spend more money when it begins construction on its 1.2 GW power campus, but that will also be its first step toward developing long-term revenue streams. The company lost $29.7 million in the third quarter.

Oklo will deliver its fourth-quarter results on March 17, and any good news that report brings could help the stock as well.

The Aurora powerhouse could receive accelerated approval

In November, the Department of Energy approved the Nuclear Safety Design Agreement for Oklo's Aurora Fuel Fabrication Facility at Idaho National Laboratory. That's a big step, and if the Nuclear Regulatory Commission grants accelerated approval for the Aurora powerhouse at the laboratory, it would signal to the markets that the company's technology is valid.

It has already broken ground on the Idaho site. Now, Oklo must wade through the regulatory process, including regulatory pre-application and licensing submissions.

The price of oil will likely remain high

Higher oil prices will only accelerate the trend toward greater use of nuclear power. The volatility of fossil fuel prices helps support the business case for next-generation nuclear providers.

With Brent crude crossing the $100-per-barrel mark and West Texas Intermediate crude up by more than 80% since the start of 2026 due to the Iran war, the narrative around nuclear has shifted from green energy to energy stability. Hyperscalers that are relying heavily on natural gas generation to meet their electricity needs face financial risks.

Oklo's model is to own its reactors and sell the electricity they generate through long-term power purchase agreements (PPAs). That strategy gives their customers a fixed price for 20 years. It's a model that's looking increasingly attractive to clients as oil and natural gas prices rise.

Hyperscalers aren't the only potential clients for Oklo. Industrial companies that use oil or natural gas for "process heat" (such as chemical plants or refineries) are more likely to see the appeal in switching to Oklo's high-temperature fast reactors when their current fuel bills double.

James Halley has positions in Microsoft. The Motley Fool has positions in and recommends Meta Platforms, Microsoft, and Oracle. The Motley Fool has a disclosure policy.