NRC accelerates Oklo reactor review as Wall Street turns cautious

Investing.com -- Shares of advanced nuclear company Oklo Inc (NYSE:OKLO) fell 3.4% Tuesday despite regulatory tailwinds that could smooth its path to deployment. The decline occurred amid a downgrade at BofA Securities, which moved the stock from Buy to Neutral, citing concerns about valuation and adoption timing for small modular reactors (SMRs).

The U.S. Nuclear Regulatory Commission (NRC) announced it has accepted Oklo’s Principal Design Criteria (PDC) topical report for formal review under an accelerated timeline. The regulator has also proposed a faster evaluation schedule, which marks a departure from typical licensing durations and signals alignment with recent federal pushes for U.S. nuclear innovation.

Oklo's PDC framework defines core safety and performance standards and allows future licensing applications to reference it, minimizing redundancies. The NRC’s decision to review the submission in less than half the traditional timeline underscores growing urgency around nuclear energy expansion, especially in light of recent executive orders and the ADVANCE Act.

“This is a reflection of the work by the Oklo team, and the NRC’s commitment to timely oversight,” said Oklo co-founder and CEO Jacob DeWitte. “Modernized, non-duplicative processes are key enablers for how advanced nuclear can scale rapidly and safely.”

While the regulatory developments are favorable, BofA’s note pointed to high investor expectations already priced into the stock. Analyst Dimple Gosai explained the downgrade stems from reverse DCF models implying deployments far above company forecasts and unrealistic discount rates relative to sector norms.

“We downgrade Oklo (Neutral from Buy) and NuScale (Underperform from Neutral) as valuations now embed deployment ramps and discount rates we view as unrealistic at this stage of SMR adoption,” said Gosai. “At current levels, Oklo trades at 16.9x/10.8x 2032/33E EV/EBITDA…with implied discount rates of just 10.9%, well below our 14% sector assumption.”

Oklo has positioned itself as a next-generation energy company enabling clean, scalable baseload generation. The NRC’s fast-tracking of its report further cements its potential to lead among advanced nuclear startups, assuming it can meet the implied growth trajectory shareholders expect.

Despite the long-term optimism surrounding nuclear power and legislative momentum in its favor, near-term concerns linger. “While we remain positive on the long-term nuclear theme, current valuations leave little room for error and the near-term risk/reward skews negative,” Gosai added.

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