Oklo Inc (NYSE: OKLO) says it has been conditionally selected to provide nuclear energy to the Eielson Air Force Base in Alaska. Shares of the nuclear technology company are up more than 25% on Wednesday.
OKLO has received a Notice of Intent to Award from the Defense Logistics Agency, which marks a major milestone for the nuclear startup based out of Santa Clara, California.
Including today’s rally, Oklo stock is up nearly 250% versus its year-to-date low on April 4th.
Significance of US Air Force deal for Oklo stock
US Air Force deal is significant for OKLO as it validates the company’s unconventional model of delivering off-grid nuclear energy using compact, fast-spectrum reactors.
The nuclear-tech firm promises round-the-clock power and heat to remote installations from its “Aurora Powerhouse” – crucial for a site like Eielson located in the challenging climate of Alaska.
If fully executed, the Air Force agreement could be a watershed moment for Oklo Inc, which has spent years navigating regulatory bottlenecks.
In the press release, the company’s chief executive Jacob DeWitte hailed the opportunity as pivotal in demonstrating the viability of US developed fast reactor technology for defense applications.
More importantly, the announcement sets a precedent: a customer, specifically the US government, is willing to bet on Oklo’s unproven tech, providing potential leverage for future deals.
Note that Oklo stock is trading at an all-time high on Wednesday.
Why Oklo shares remain a ‘sell’ on Wednesday
Investors should practice caution and consider taking profit in OKLO shares following a meteoric run since their valuation now looks stretched to unsustainable levels.
An inflated market cap of more than $9 billion is pricing in perfect execution on a multi-year, capital-intensive rollout.
However, without a single operational plant, execution risks at Oklo Inc. remain high.
Oklo is a pre-revenue company that faces significant regulatory risks as well.
It’s yet to obtain a combined operating license, and while NRC has begun reviews, full approval could take years.
Additionally, competition remains a threat to Oklo stock, given rivals like NuScale have already received NRC Design Certification.
Note that the Air Force deal announced today is also conditional only, pending approval from the Nuclear Regulatory Commission and completion of key licensing milestones.
And it’s not like OKLO is a dividend stock that incentivizes investment despite these challenges either.
How Wall Street recommends playing OKLO in 2025
Pulling out of Oklo stock following its cosmic rally in recent months may be a smart decision also because analysts now forecast significant downside in it in the back half of 2025.
While the consensus rating on the nuclear power stock remains at “overweight”, the mean target of a tad above $54 indicates potential for up to a 20% decline from current levels.
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