NuScale Stock vs. Oklo Stock: Wall Street Says Buy One and Sell the Other.

Nuclear stocks that make small modular reactors (SMRs) are attracting investor and analyst interest. SMRs are nuclear fission reactors that are smaller than conventional reactors. They can be built in a factory and then transported to a site.

Although NuScale Power (NYSE: SMR) holds a regulatory lead as the first SMR company to obtain design certification from the U.S. Nuclear Regulatory Commission, Wall Street analysts consistently assign a higher premium and more bullish outlook to Oklo (NYSE: OKLO), which also makes SMRs.

The average price target for NuScale is $12.63, just 30% above its share price as of Sept. 7. Oklo, on the other hand, has an average price target of $79.88, nearly twice its recent share price. While it's important to remember that price targets are just estimates, there are solid reasons to prefer Oklo over NuScale.

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Oklo's integrated model is an advantage

Oklo has a build-own-operate revenue stream. Instead of just selling reactor hardware, Oklo plans to retain plant ownership and sell electricity directly to end users through long-term power purchase agreements. This approach generates predictable, recurring, high-margin software-like utility revenue for decades.

NuScale sells SMRs to traditional public utilities. Analysts see this approach as exposing NuScale to supply chain friction; customer order cancellations, such as the high-profile Utah Associated Municipal Power Systems cancellation in 2023; and capital-intensive utility sales cycles.

Oklo is signing agreements with hyperscalers

Oklo has positioned itself as a primary benefactor of the artificial intelligence (AI) boom by marketing directly to tech companies that are building data centers. Oklo has secured major pre-agreements with tech players and hyperscalers, including a recent deal among Oklo, Nvidia (NASDAQ: NVDA) and the Los Alamos National Laboratory to collaborate on the advancement of nuclear infrastructure, (AI)-enabled research, and nuclear fuel research and development at the lab in New Mexico.

Oklo's Aurora fast-fission design is engineered to run on recycled nuclear waste. By closing the fuel loop, analysts see long-term cost advantages and reduced fuel-supply chain risks compared with light-water reactor designs.

The company has a 1.2-gigawatt (GW) power agreement with Meta Platforms (NASDAQ: META) and a 12 GW pipeline deal with Switch.

NuScale, on the other hand, relies primarily on traditional regional power grids and municipal utilities to distribute power. Wall Street views direct tech partnerships as a faster, higher-demand route to monetization than waiting for slow-moving municipal power grids.

Oklo has a stronger cash runway

It's important to note that both stocks pose a risk, as neither has much revenue and both have been losing money for years. NuScale's shares are down more than 20% so far this year, while Oklo's shares are down more than 38%.

Oklo is on a more secure financial footing. In the second quarter, it had more than $1.6 billion in cash and cash equivalents, compared to only $84.3 million in total debt, providing a long runway before it needs to sell additional debt or issue more stock that dilutes existing shareholders.

NuScale, on the other hand, as of the second quarter, had only $766.5 million in cash and cash equivalents, with $824.4 million in total debt.

Oklo is taking advantage of its uniqueness

Oklo has a key dual strategy, pairing proprietary reactor technology with secure uranium supplies.

This vertical integration acts as both a supply shield and a growth engine. As the nation races to fortify energy supply chains and meet surging power demand, businesses controlling both the technology and the fuel source hold a distinct strategic advantage.

Oklo also has a stronger financial situation, which makes it easier to grow without further diluting its stock.

James Halley has positions in Nvidia. The Motley Fool has positions in and recommends Meta Platforms and Nvidia. The Motley Fool recommends NuScale Power. The Motley Fool has a disclosure policy.