Oklo Stock Jumps As Analyst Cites AI-Driven Clean Energy Boom: Retail Eyes More Upside
By Stocktwits Inc | First Published Dec 20, 2024, 12:52 AM ISTWedbush projects the SMR market will more than double by 2032, from $6 billion to $14 billion, providing Oklo with a significant opportunity amid surging clean energy demand.
Shares of nuclear power provider Oklo Inc. jumped over 13% in midday trade on Thursday after Wedbush initiated an ‘Outperfom’ rating on the stock citing elevated demand from the surge in artificial intelligence (AI) applications.
The brokerage highlighted that the “AI revolution” is driving significant demand for clean energy to power AI initiatives with necessary computing power expected to grow 10-fold by 2030, putting Oklo in a great position to benefit from this elevated demand.
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“Hyperscalers, data centers, and the US Government are turning to SMRs and nuclear technology for clean energy and we believe Oklo is in an optimal position to capitalize on this opportunity,” it said.
Wedbush has set a price target of $26 on Oklo on the expectation that the Sam Altman-backed enterprise will develop its first small modular reactor (SMR), called Aurora, by 2027.
Aurora is forecast to give the company an edge over its competitors since it uses High-Assay Low-Enriched Uranium (HALEU) as fuel, which is meant to be superior to the existing LEU used in civil nuclear reactors.
“The company itself is selling power, not the reactors, directly to customers under long-term contracts which in turn provide long-term recurring revenues and a streamlined regulatory pathway,” the brokerage wrote in its research note.
It added that Oklo’s current microreactor project pipeline is 93% ahead of its 2027 planned deployment, with data centers accounting for around 600MW of its 1,350 MW of power under letters of intent.
This includes its biggest nuclear deal till date, announced on Wednesday, with data center operator Switch to deploy 12 gigawatts (GW) of power over the next two decades.
Wedbush noted that while the market is becoming increasingly competitive, Oklo is a “step ahead” of the competition with a unique, “attractive build, own, and operate business model " that sets it apart from its peers.
On Stocktwits, retail sentiment around the stock dipped to ‘bullish’ from ‘extremely bullish’ a day ago while message volumes remained at ‘extremely high’ levels.
One user pointed to the stock’s bullish engulfing pattern, which suggest buyers are taking control from sellers.
Some are anticipating that stock will potentialy cross the $22 mark before markets close. The stock has already surged to $21.69 on Thursday afternoon.
Others are more cautious, citing that the stock is approaching critical support levels.
Wedbush expects the value of the SMR market to more than double from $6 billion to $14 billion by 2032.
“We believe data centers will represent a massive opportunity in the SMR space over the next decade as the amount of energy needed to create, store, and compute is exponentially growing as our technological world further develops,” it added.
Oklo’s stock has nearly doubled in value so far this year.
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Read also: Sam Altman-Backed Oklo Stock Swings Wildly After Announcing Biggest Nuclear Deal So Far: Retail Flags ‘Rug Pull’
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