It’s not often that you can spot an investment opportunity with 5,000% or more in potential upside. But that’s could be the case for Oklo (NYSE: OKLO). Oklo is a next-gen energy producer focused on small modular reactors, or SMRs. SMRs are essentially miniature nuclear power plants that have several distinct advantages. SMR systems, for example, may be a perfect fit for satisfying the artificial intelligence (AI) industry’s rapidly rising energy demands.
To be clear, there’s plenty of risk to Oklo as an investment thesis. But that’s why there’s huge upside potential.
Want to know exactly why Oklo shares have such big potential? A new study highlights the opportunity perfectly.
Oklo’s SMR technology could be a game changer.
It’s not often that you can spot an investment opportunity with 5,000% or more in potential upside. But that’s could be the case for Oklo (OKLO +11.53%). Oklo is a next-gen energy producer focused on small modular reactors, or SMRs. SMRs are essentially miniature nuclear power plants that have several distinct advantages. SMR systems, for example, may be a perfect fit for satisfying the artificial intelligence (AI) industry’s rapidly rising energy demands.
To be clear, there’s plenty of risk to Oklo as an investment thesis. But that’s why there’s huge upside potential.
Want to know exactly why Oklo shares have such big potential? A new study highlights the opportunity perfectly.
Today’s Change
(11.53%) $7.49
Current Price
$72.47
This study suggests a $1.5 trillion opportunity for Oklo
Urenco, a uranium enrichment services provider, recently sponsored a study to estimate the potential opportunity for the SMR market. Keep in mind that SMR technology remains minimally adopted worldwide. There are only two or three SMRs in operation today — all of which are located in Asia. Only five additional units are under construction worldwide. There are dozens, however, located across nearly every continent, that are in some stage of the funding or permitting process.
In summary, SMRs don’t exist in any meaningful scale anywhere in the world today. The pipeline, however, is strong. Over the next decade, the number of SMRs in operation could grow by 1,000% or more.
Accordingly, Urenco’s study determined that there’s a huge runway of growth available to SMR developers.
“Data centres, chemicals, and coal repowering (i.e., coal-to-nuclear transition) are expected to drive near-term demand, with synthetic aviation fuels representing the largest long-term opportunity,” the study concluded. “Without SMRs, these industrial sectors may face constrained growth or be forced to default to carbon-intensive alternatives due to the lack of clean, reliable energy.”
In total, Urenco’s study found that SMRs represent an investment opportunity of up to $1.5 trillion. It believes that up to 700 GW of SMR capacity could be brought online by 2050, representing twice the current nuclear capacity worldwide.
With a market cap of just $13 billion, Oklo clearly has a big opportunity ahead of it. If shares rose 3,000% in value, the company would have a market cap of around $400 billion assuming a constant share count.
Given the conclusions of Urenco’s study — plus the lucrative potential of deploying SMRs into space — a $400 billion market cap for whichever company succeeds in scaling its SMR technology seems reasonable. But will Oklo be the winning SMR stock? There are a few things to keep in mind before jumping in.
Image source: Getty Images.
Should you load up on Oklo shares? (Hint: Maybe)
There’s a ton of potential upside to Oklo shares. But there’s also plenty of risk. Keep in mind that Oklo isn’t the only company pushing SMR technology forward. There are other pure-play SMR stocks like NuScale Power (SMR +10.29%), plus a growing number of well-financed conglomerates exploring their own solutions. Even if SMR technology becomes a game changer for a variety of industries, like Urenco’s study predicts, there’s no guarantee that Oklo’s particular technological approach wins out.
Digging further into Urenco’s study uncovers more reason for caution. Right now, only 7 GW of SMR capacity is expected to be added globally by 2050. Yet the study calls for a total opportunity of 700 GW — 2 orders of magnitude bigger.
The study stresses:
The gap between today’s 7 GW and tomorrow’s 700 GW is bridgeable. The technology exists. The industrial demand is urgent. The policy momentum is building.
But later, the study acknowledges that this bridge will be very challenging to cross, highlighting that “the 700 GW potential market will require the transformation of the nuclear delivery model.”
In short, many major catalysts will need to evolve and align for a stock like Oklo to truly realize its 3,000% in potential upside. But if you’re an aggressive investor looking for stocks with massive upside potential, Oklo should top your watch list.
