BofA Cautions That Oklo and NuScale's Stock Gains Are Driven by Overly Optimistic Expectations
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Sep 30 2025
0mins
Should l Buy OKLO?
Source: MarketWatch
Nuclear Energy Stocks Surge: Stocks in the nuclear-energy sector, particularly Oklo Inc. and NuScale Power Corp., have seen significant increases, with Oklo's shares rising over 400% and NuScale's over 100% in 2025, driven by the demand for energy to support artificial intelligence initiatives.
Analyst Concerns on Valuations: Bank of America analyst Dimple Gosai cautions that the current valuations of these stocks may be based on "unrealistic" expectations regarding the deployment of small modular reactors, which, while easier and cheaper to build, have lower power-generating capacity compared to traditional nuclear reactors.
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Analyst Views on OKLO
Wall Street analysts forecast OKLO stock price to rise
12 Analyst Rating
7 Buy
5 Hold
0 Sell
Moderate Buy
Current: 69.070
Low
90.00
Averages
125.11
High
175.00
Current: 69.070
Low
90.00
Averages
125.11
High
175.00
About OKLO
Oklo Inc. is an advanced nuclear technology company. The Company is engaged in developing fast fission power plants to provide clean, reliable, and affordable energy at scale. It is developing advanced fuel recycling technologies in collaboration with the United States Department of Energy and United States National Laboratories. It provides 24/7 clean energy to data centers, factories, industrial sites, communities, and defense facilities. It offers heat and power through power purchase agreements. Its powerhouse product line, Aurora, is designed to be inherently safe, to be able to run on fresh or recycled fuel, and to produce 15-50 megawatts electric (MWe) and with the potential to expand powerhouse size to produce 100 MWe of electricity. The Company intends to develop specialized radioisotope production capabilities to address urgent supply shortages in life-saving medical radioisotopes and advanced industrial applications.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Oklo: The Future Potential of a Nuclear Start-Up
- Small Modular Reactor Development: Oklo is developing small modular nuclear reactors (SMRs) with its “Aurora Powerhouse” design, which will have lower electrical output but a much smaller footprint than traditional nuclear plants, enhancing flexibility in power-demand locations.
- Business Model Shift: Unlike other nuclear start-ups, Oklo plans to build and operate its reactors, selling electricity directly to customers, which aligns its model more closely with electric utilities and could lead to steady revenue streams.
- High-Risk Investment: Currently in its “pre-commercial” phase, Oklo does not expect to turn a profit until at least 2027, facing numerous regulatory and operational hurdles, thus its stock is considered a high-risk speculative investment.
- Retirement Investment Potential: While Oklo is not suitable for investors seeking immediate cash flow, it presents a compelling option for those planning to retire in ten years or more, given its potential for massive growth and reliable long-term income.
See More
Oklo: A Surprising Retirement Investment Option
- Small Modular Reactor Development: Oklo is developing small modular nuclear reactors (SMRs) with its “Aurora Powerhouse” design, which allows for more flexible electricity production despite lower output than traditional plants, making it suitable for high-demand areas.
- Innovative Business Model: Unlike other nuclear startups, Oklo plans to build and operate its reactors, selling electricity directly to customers rather than just selling the equipment, positioning itself more like an electric utility and potentially generating steady revenue streams.
- Risk and Reward: Oklo does not expect to become profitable until at least 2027 and is currently in the “pre-commercial” phase, facing regulatory and operational hurdles, thus considered a high-risk investment; however, if successful, it could provide long-term cash flow for retirees.
- Long-Term Growth Potential: While not suitable for those seeking immediate cash flow, Oklo offers significant growth potential in the short term and reliable income prospects for investors planning to retire in ten years or more.
See More
Analysis of Small Modular Reactor Stock Pullback
- Market Pullback Reasons: Since the beginning of 2024, NuScale Power's stock has surged over 400% and Oklo Inc's by nearly 600%, yet both have seen a nearly 20% decline in 2026, primarily due to market concerns regarding their sales pipeline execution capabilities, reflecting investor anxiety over short-term profitability.
- Feasibility Challenges: While small modular reactor technology is considered crucial for transitioning the global economy in the long term, research indicates that its high construction costs, slow build times, and significant risks may prevent it from playing a substantial role in replacing fossil fuels in the next 10-15 years, leading to diminished investor confidence.
- Project Delays: NuScale's key project in Romania, initially slated for deployment in 2030, has now been pushed to 2033, with analysts downgrading stock ratings due to rising execution and capital risks, further exacerbating market uncertainty.
- Capital Needs and Dilution: With market valuations of $10 billion for Oklo and just above $4 billion for NuScale, the lack of guaranteed large-scale deployment of these technologies remains a concern, and both companies will need to raise significantly more capital to meet contractual obligations, potentially leading to share dilution and increased investment risks.
See More
Oklo Shares Drop 9.4% Amid Hot Inflation Data
- Stock Pullback: Oklo shares fell 9.4% on Friday, trading at $62.50 with a market cap of $11 billion, reflecting market concerns over high inflation impacting speculative stocks.
- Inflation Impact: The producer price index (PPI) released today showed core wholesale prices surged 0.8%, nearly tripling economists' expectations, leading to lowered future earnings expectations for pre-revenue companies like Oklo.
- Rate Expectations: High inflation is likely to prompt the Federal Reserve to maintain elevated interest rates, negatively affecting speculative stocks like Oklo, as higher rates diminish the present value of future earnings, further eroding investor confidence.
- Future Outlook: Despite a more than 20% drop in Oklo's stock over the past month, the Department of Energy indicated that multiple reactors in its accelerated Reactor Pilot Program, which Oklo participates in, are expected to achieve 'criticality' by the deadline, providing a glimmer of hope for the company's future.
See More
Investment Outlook for Small Modular Reactors
- Technological Innovation: Oklo is developing the Aurora reactor, a liquid-metal-cooled design using liquid sodium, which enhances fuel efficiency and reduces operational pressure; however, it currently generates no revenue and reported a $36.3 million operational loss in Q3 2025.
- Market Potential: The International Energy Agency forecasts that AI will double global power demand by 2030, positioning Oklo's SMR technology as a potential solution for powering data centers and alleviating grid strain, yet the company faces significant cash burn challenges.
- Competitive Advantage: BWX Technologies leverages its extensive experience in nuclear energy since the 1950s to introduce the 50-megawatt BWXT Advanced Nuclear Reactor prototype, which is expected to attract government interest, and its revenue grew by 18% in 2025, indicating strong market performance.
- Financial Health: Unlike Oklo, BWX not only focuses on SMR technology but also achieved a 15% net income margin and a 17% increase in operating cash flow, demonstrating stronger profitability and financial stability, making it a safer investment choice.
See More
Potential and Challenges of Small Modular Reactors
- Oklo's Technology Outlook: Oklo is developing a liquid-metal-cooled small modular reactor (SMR) with its Aurora reactor using liquid sodium for cooling, which offers higher fuel efficiency and lower operational pressures; however, it currently generates no revenue and reported a $36.3 million loss in Q3 2025, indicating a fragile business model.
- BWX's Market Performance: BWX Technologies focuses on small nuclear reactor development, with its BANR reactor being a 50-megawatt gas-cooled prototype that is expected to attract government interest, achieving an 18% revenue growth and a 20% increase in non-GAAP earnings per share in 2025, showcasing strong profitability and market demand.
- Nuclear Fuel Recycling Investment: Oklo plans to invest $1.68 billion in a nuclear fuel recycling facility in Oak Ridge, Tennessee, which is expected to be the first of its kind in the U.S.; despite its promising technology outlook, its current financial situation remains concerning.
- Industry Competitive Landscape: While both Oklo and BWX's SMRs are in prototype stages, BWX's diversified business model and stable revenue streams make it a safer investment choice, reflecting the intensifying competition in the small modular reactor market.
See More
Oklo: The Future Potential of a Nuclear Start-Up
- Small Modular Reactor Development: Oklo is developing small modular nuclear reactors (SMRs) with its “Aurora Powerhouse” design, which will have lower electrical output but a much smaller footprint than traditional nuclear plants, enhancing flexibility in power-demand locations.
- Business Model Shift: Unlike other nuclear start-ups, Oklo plans to build and operate its reactors, selling electricity directly to customers, which aligns its model more closely with electric utilities and could lead to steady revenue streams.
- High-Risk Investment: Currently in its “pre-commercial” phase, Oklo does not expect to turn a profit until at least 2027, facing numerous regulatory and operational hurdles, thus its stock is considered a high-risk speculative investment.
- Retirement Investment Potential: While Oklo is not suitable for investors seeking immediate cash flow, it presents a compelling option for those planning to retire in ten years or more, given its potential for massive growth and reliable long-term income.
See More
Oklo: A Surprising Retirement Investment Option
- Small Modular Reactor Development: Oklo is developing small modular nuclear reactors (SMRs) with its “Aurora Powerhouse” design, which allows for more flexible electricity production despite lower output than traditional plants, making it suitable for high-demand areas.
- Innovative Business Model: Unlike other nuclear startups, Oklo plans to build and operate its reactors, selling electricity directly to customers rather than just selling the equipment, positioning itself more like an electric utility and potentially generating steady revenue streams.
- Risk and Reward: Oklo does not expect to become profitable until at least 2027 and is currently in the “pre-commercial” phase, facing regulatory and operational hurdles, thus considered a high-risk investment; however, if successful, it could provide long-term cash flow for retirees.
- Long-Term Growth Potential: While not suitable for those seeking immediate cash flow, Oklo offers significant growth potential in the short term and reliable income prospects for investors planning to retire in ten years or more.
See More
Analysis of Small Modular Reactor Stock Pullback
- Market Pullback Reasons: Since the beginning of 2024, NuScale Power's stock has surged over 400% and Oklo Inc's by nearly 600%, yet both have seen a nearly 20% decline in 2026, primarily due to market concerns regarding their sales pipeline execution capabilities, reflecting investor anxiety over short-term profitability.
- Feasibility Challenges: While small modular reactor technology is considered crucial for transitioning the global economy in the long term, research indicates that its high construction costs, slow build times, and significant risks may prevent it from playing a substantial role in replacing fossil fuels in the next 10-15 years, leading to diminished investor confidence.
- Project Delays: NuScale's key project in Romania, initially slated for deployment in 2030, has now been pushed to 2033, with analysts downgrading stock ratings due to rising execution and capital risks, further exacerbating market uncertainty.
- Capital Needs and Dilution: With market valuations of $10 billion for Oklo and just above $4 billion for NuScale, the lack of guaranteed large-scale deployment of these technologies remains a concern, and both companies will need to raise significantly more capital to meet contractual obligations, potentially leading to share dilution and increased investment risks.
See More
Oklo Shares Drop 9.4% Amid Hot Inflation Data
- Stock Pullback: Oklo shares fell 9.4% on Friday, trading at $62.50 with a market cap of $11 billion, reflecting market concerns over high inflation impacting speculative stocks.
- Inflation Impact: The producer price index (PPI) released today showed core wholesale prices surged 0.8%, nearly tripling economists' expectations, leading to lowered future earnings expectations for pre-revenue companies like Oklo.
- Rate Expectations: High inflation is likely to prompt the Federal Reserve to maintain elevated interest rates, negatively affecting speculative stocks like Oklo, as higher rates diminish the present value of future earnings, further eroding investor confidence.
- Future Outlook: Despite a more than 20% drop in Oklo's stock over the past month, the Department of Energy indicated that multiple reactors in its accelerated Reactor Pilot Program, which Oklo participates in, are expected to achieve 'criticality' by the deadline, providing a glimmer of hope for the company's future.
See More
Investment Outlook for Small Modular Reactors
- Technological Innovation: Oklo is developing the Aurora reactor, a liquid-metal-cooled design using liquid sodium, which enhances fuel efficiency and reduces operational pressure; however, it currently generates no revenue and reported a $36.3 million operational loss in Q3 2025.
- Market Potential: The International Energy Agency forecasts that AI will double global power demand by 2030, positioning Oklo's SMR technology as a potential solution for powering data centers and alleviating grid strain, yet the company faces significant cash burn challenges.
- Competitive Advantage: BWX Technologies leverages its extensive experience in nuclear energy since the 1950s to introduce the 50-megawatt BWXT Advanced Nuclear Reactor prototype, which is expected to attract government interest, and its revenue grew by 18% in 2025, indicating strong market performance.
- Financial Health: Unlike Oklo, BWX not only focuses on SMR technology but also achieved a 15% net income margin and a 17% increase in operating cash flow, demonstrating stronger profitability and financial stability, making it a safer investment choice.
See More
Potential and Challenges of Small Modular Reactors
- Oklo's Technology Outlook: Oklo is developing a liquid-metal-cooled small modular reactor (SMR) with its Aurora reactor using liquid sodium for cooling, which offers higher fuel efficiency and lower operational pressures; however, it currently generates no revenue and reported a $36.3 million loss in Q3 2025, indicating a fragile business model.
- BWX's Market Performance: BWX Technologies focuses on small nuclear reactor development, with its BANR reactor being a 50-megawatt gas-cooled prototype that is expected to attract government interest, achieving an 18% revenue growth and a 20% increase in non-GAAP earnings per share in 2025, showcasing strong profitability and market demand.
- Nuclear Fuel Recycling Investment: Oklo plans to invest $1.68 billion in a nuclear fuel recycling facility in Oak Ridge, Tennessee, which is expected to be the first of its kind in the U.S.; despite its promising technology outlook, its current financial situation remains concerning.
- Industry Competitive Landscape: While both Oklo and BWX's SMRs are in prototype stages, BWX's diversified business model and stable revenue streams make it a safer investment choice, reflecting the intensifying competition in the small modular reactor market.
See More
