By Jinjoo Lee

Forget about the froth in tech valuations. The real excess might be building up in energy stocks.

For all the fears about stretched technology shares, many of those companies are hugely profitable ones that will keep chugging along even if the artificial-intelligence boom doesn't have legs. Not so in the energy sector. A group of non-revenue-generating energy companies have collectively ballooned in value to more than $45 billion in hopes that tech companies will one day pay for their yet-to-be-built power.

The biggest of these is the OpenAI CEO Sam Altman-backed nuclear startup Oklo, whose shares have risen about eightfold year to date. The company now has a market cap of roughly $26 billion, making it the biggest U.S.-incorporated public company that generated no revenue in the past 12 months, according to data from S&P Global Market Intelligence.

Oklo is developing small modular nuclear reactors that use a non-water coolant -- liquid metal sodium -- and an enriched type of uranium fuel that is in limited supply. It doesn't yet have a license from the U.S. Nuclear Regulatory Commission or binding contracts with power purchasers. Wall Street analysts don't expect the company to generate substantial revenue until 2028.

Another zero-revenue company is Fermi, which was valued at roughly $19 billion upon its public debut earlier this month. Only two other no-revenue companies had larger market caps than Fermi on their first day of trading after an IPO, adjusted for inflation, according to Jay Ritter, finance professor at the University of Florida. These are EV-maker Rivian, which went public in 2021, and Corvis, an optical network equipment maker that went public during the dot-com bubble.

The company is backed by former energy secretary Rick Perry and helmed by Toby Neugebauer, the former chief executive of the failed anti-woke bank startup GloriFi. It has plans to build out 11 gigawatts worth of power for data centers, roughly the amount of capacity in New Mexico. Though its shares haven't sustained their initial pop after listing, the company still commands a market capitalization of over $17 billion. That isn't too far from the valuation of Talen Energy, a company that already owns an operating power fleet of about 11GW.

Fermi plans to meet that 11GW target using natural gas, nuclear, solar and battery power. It has a way to go: So far, it has secured natural-gas equipment that would cover just 5% of its total capacity goal. The company hasn't lined up any binding customer contracts.

Companies developing even smaller "micro-modular" nuclear reactors are also commanding hefty market caps despite their lack of revenue. Shares of Nano Nuclear Energy, which made its debut on the public markets last year, have more than doubled so far this year. The company is valued at more than $2 billion. Terra Innovatum, which went public last week through a SPAC merger, is valued at over $1 billion.

Others swept up in the AI excitement generate revenue but aren't expected to turn a profit for many years. Such companies include nuclear small modular reactors company NuScale Power, which earns some engineering and licensing fees for an SMR project in Romania. Its shares have surged 155% so far this year. Hydrogen fuel-cell company Plug Power's shares, which had been in the gutter for many years, surged 90% this year to $4.8 billion on AI excitement. Neither company is expected to turn a profit until 2030, according to Wall Street analysts polled by FactSet.

One reason investors are piling into more speculative energy companies could be because profit-generating ones already command lofty multiples. Fuel-cell company Bloom Energy's shares have rallied more than 400% year to date and are now valued at 133 times forward earnings. The company added about $5.4 billion in market cap on Monday after Brookfield Asset Management said it would invest up to $5 billion to deploy Bloom's technology. Nuclear-fuel company Centrus Energy is valued at 99 times forward earnings.

Arguably, more commercial interest might be just what was needed to help expensive or unproven technologies take off. But based on the track record of zero or minimal revenue EV startups that went public in 2020, (remember Nikola, Fisker and Lordstown?), it is likely that many such companies will fizzle rather than pop.

If the AI bubble ever deflates, these energy companies with no revenue have the farthest to fall and little in the way of a cushion.

Write to Jinjoo Lee at jinjoo.lee@wsj.com

(END) Dow Jones Newswires

October 15, 2025 05:30 ET (09:30 GMT)

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