For Oklo Stock, One Thing Is More Important Than Its Continued Losses

Oklo CEO Jacob DeWitte. (Mandel Ngan / AFP / Getty Images)

Key Points

• Oklo reported a third-quarter loss of 20 cents a share, compared with analyst expectations of 13 cents a share and deeper than the loss of 8 cents a share in the prior year.
• Oklo’s net loss was $29.7 million, higher than the $18.2 million analysts anticipated. The company has no revenue.
• The Energy Department approved the nuclear safety design for Oklo’s planned fuel fabrication facility at Idaho National Laboratory, a key step for its Aurora-INL powerhouse.

Oklo’s lack of revenue and triple-digit stock price gains have raised eyebrows this year, but the company’s wider loss didn’t hit the stock. Far from it. None of that seems to matter as long as Oklo is progressing to building its first nuclear plant.

After markets closed Tuesday, Oklo posted a loss of 20 cents a share in its third quarter, while analyst had expected 13 cents. The loss was 8 cents a share a year earlier.

Oklo didn’t report any revenue, and its net loss of $29.7 million was far deeper than the $18.2 million analysts expected. The shares dipped in after-hours trading, but roared back for a gain of 9.7% to $114.30 on Wednesday.

The sentiment on the Street appears to be that the numbers are far less important than Oklo’s headway toward deploying its first nuclear power plant. BofA Securities analysts said the company had “delivered meaningful progress on fuel de-risking and regulatory milestones” during the quarter.

One of the biggest developments was that Oklo is pursuing Energy Department authorization for its first commercial-scale powerhouse, which the Aurora, Ill.-based utility says will speed up the time to operations. While Oklo is still pursuing a commercial license from the Nuclear Regulatory Committee, the effort to win DOE authorization reduces the overall risk, the company said.

Others saw the news as less favorable. The new focus on utilizing DOE authorization means commercial operations may occur later than promised, Citi Research analysts said.

“This along with lack of tangible sequential pipeline growth may disappoint some investors,” the firm wrote. Citi Research rates Oklo at Neutral with a $68 price target, suggesting shares could fall as much as 39% from Wednesday’s levels.

BofA Securities raised concerns as well, saying that while the third-quarter update was encouraging, “bears would argue that fabrication cost, yield, and recycling data remain missing, and that until Oklo proves scalable, low-cost throughput, the model is more concept than margin.”

The bank rates Oklo at Neutral with a $111 price target, down from $117.

Shares have soared more than 400% this year, reflecting optimism about Oklo’s fast reactors, as well as for the broader nuclear sector, as power demand increases. The stock closed at a record $174.14 on Oct. 14 and notched its highest intraday level on record the following day.

Oklo has gained attention since going public in 2024, when it merged with a special purpose acquisition company headed by OpenAI CEO Sam Altman.

However, with attention comes scrutiny. The company’s lack of revenue means many on Wall Street are questioning what is underpinning the rise in the stock. There are also concerns about how long it will take to begin commercial operations.

But Oklo is steadily plodding along. In September, it broke ground on its first nuclear power plant at INL, one of 42 federally funded laboratories in the U.S.

There is more to come on that front. BofA Securities noted that blasting is due in mid-November, followed by excavation in January.

The company is also making progress on a planned fuel- fabrication facility at INL. Also on Tuesday, the company said the DOE had approved a nuclear safety design agreement for the facility.

The plant will produce fuel for the Aurora-INL, which was selected for the DOE’s Reactor Pilot Program in August. The fabrication facility itself was chosen for a separate project at the end of September.

CEO Jacob DeWitte described the development as a clear marker of progress for the company. “Advanced fuel fabrication and recycling technologies represent a significant unlock for our business, addressing fuel-supply challenges while transforming fuel economics and creating new revenue opportunities,” he said.

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