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Oklo and NuScale Stocks Are Downgraded. What’s Spooking Analysts.

Sep 30, 2025 14:35:00 -0400 by Mackenzie Tatananni | #Energy #Street Notes

NuScale Power aims for its Carbon Free Power Project at Idaho National Laboratory to have its first power module up and running by 2029. (Courtesy NuScale)

Key Points

There are plenty of ways to play the nuclear sector, and skepticism is beginning to build around some of this year’s rising stars.

BofA Securities downgraded Oklo and NuScale Power stocks on Tuesday, cutting Oklo to Neutral from Buy and NuScale to Underperform from Neutral.

The sharp re-rating across the small modular reactor group “leaves the near-term risk/reward skewed negative,” BofA analysts wrote, referring to last week’s selloff in nuclear stocks. Crucially, valuations now embed deployment ramps and discount rates that “we view as unrealistic at this stage of SMR adoption,” the firm wrote.

Earlier this year, Oklo was named as one of several participants in the U.S. Department of Energy’s Reactor Pilot Program, which aims to have at least three test reactors up and running at national laboratories across the country by July 2026, ahead of Oklo’s own deployment targets.

The company has attracted a deal of scrutiny for its timelines but maintains that it remains on track to meet them. Last week, the company held a groundbreaking ceremony for its first nuclear powerhouse, the Aurora-INL, at Idaho National Laboratory.

The BofA team raised its price target on Oklo shares to $117 from $92 to reflect a premium to higher peer multiples, citing Oklo’s support within the Energy Department as well as the firm’s own confidence in the construction of its first plant.

Conversely, BofA lowered its price objective on NuScale stock to $34 from $38. The company’s commercialization strategy relies on partners such as ENTRA1, whose balance sheet and nuclear record “remain untested.” To make matters worse, longtime backer Fluor trimmed its stake in the company last week, which “raises further concerns on sponsor commitment.”

BofA is still bullish on the sector as a whole. However, Oklo and NuScale have gained 423% and 106% this year, respectively, as investors chased nuclear exposure tied to the data centers’ increasing power demand. “We remain positive on nuclear and the long-term SMR opportunity, but believe the rally looks extended,” the firm concluded.

Evidently, not all energy stocks are created equal. Melius Research reiterated a Buy rating and $100 price target on shares of NextEra Energy , a utility holding giant that operates a diverse portfolio of nuclear, solar, wind, and natural-gas assets.

The firm is a fan of NextEra’s “solid electric utility,” Florida Power & Light, as well as the exposure of its NextEra Energy Resources (NEER) subsidiary to “rapid power generation development, where demand is surging from electrification and the growth in AI data center infrastructure.”

The firm noted that NextEra is one of the country’s largest electric utilities, providing power to roughly 12 million people in Florida. Likewise, NEER is one of the largest energy-infrastructure-development companies, with generation assets exposed to a mix of natural gas, nuclear, and renewables.

The company recently received approval from the Nuclear Regulatory Commission to extend the license for the Point Beach Nuclear Power Plant, which provides 14% of Wisconsin’s total electricity, by 20 years. “Recent executive orders may help ease regulatory and licensing burdens, while power purchase provide financial support alongside subsidies to finance restarts and new builds,” the firm wrote.

Opinions on Wall Street are mixed. Of 22 analysts polled by FactSet, 13 rate NextEra at Buy or the equivalent. Eight rate the stock at Hold, and one at Sell.

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