By Mackenzie Tatananni

Oklo stock has taken off as the artificial-intelligence boom creates new interest in nuclear power. But skepticism remains about when its reactors will come on line, leaving some on Wall Street unsure of where to stand.

In a research note Monday, Craig-Hallum analyst Eric Stine downgraded shares of the start-up from Buy to Hold. He raised his target for the price to $59 from $43.

Shares fell 6.4% to $54.25 in response, relatively little considering that the stock remains up 156% this year and 470% over the past 12 months. The benchmark S&P 500 was up 0.8%.

Under Oklo's business model, the company will build, own, and operate its nuclear power plants. That puts it on a regulatory path "that no company has yet taken," Stine said.

Oklo has some positive developments on its side, including recent executive orders meant to kickstart the U.S. nuclear industry. However, people in the industry aren't sure the company will meet its targets.

Craig-Hallum's checks have exposed "various degrees of skepticism" surrounding Oklo's regulatory and commercial timelines, Stine wrote. The start-up aims to deploy its first nuclear power plant at Idaho National Laboratory by the end of 2027, or early in 2028 at the latest.

"We think it is prudent to wait for evidence of tangible progress," Stine wrote. The start-up's lofty goals are "predicated on regulatory success in an accelerated time-frame, and to date, the company has yet to officially apply to the U.S. Nuclear Regulatory Commission for licensing.

An initial draft application was denied due to "insufficient technical information" in 2022, according to the NRC. However, the company has steadily been making progress on this front by taking what Stine describes as "a number of steps to strengthen its regulatory prospects."

The company has forged a deep, multi-year relationship with the regulatory commission with the hopes of streamlining the process so that it can obtain licenses for other plants in the future. "The stage is now set, but OKLO still needs to prove success on the regulatory front, especially given the big run-up in shares over the last several months," Stine said.

Oklo won't generate meaningful revenue until it commercializes its technology, which will be years in the future. Oklo recently announced that it had raised $400 million in equity. Stine said he expects the company to take steps to garner additional funding "given the capital intensity of its business model."

The analyst noted several indicators of strong demand for Oklo's Aurora powerhouses, such as a tentative agreement with the Defense Logistics Agency to supply power to Eielson Air Force Base in Alaska.

"While indicative of an accelerating commercial environment, we wouldn't put the cart before the horse as all of these opportunities are predicated on timely success in the [license application] process," Stine said.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com

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June 23, 2025 16:32 ET (20:32 GMT)

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