Oklo Vs NuScale Stock (SMR) – Coverage Initiated, But Which Has The Better Outlook?

Oklo Inc. (NYSE: OKLO) is attracting increased market attention following the initiation of coverage by Barclays, which has also started covering NuScale Power Corporation (NYSE: SMR). Barclays assigned an “Overweight” rating to Oklo, signaling a positive outlook, while NuScale received a more neutral “Equal Weight” rating, leading to divergent market sentiment.

Oklo's potential within the small modular reactor (SMR) market is the key driver behind Barclays' optimistic view. As a developer, owner, and operator, Oklo is strategically positioned to generate revenue through power purchase agreements linked to its facilities.

The company currently holds 14 gigawatts (GW) of non-binding agreements with diverse customers, indicating substantial market demand. The firm suggests that successful deployment and commercialization could unlock considerable upside potential for Oklo's stock.

Adding to the positive sentiment, other analysts have also begun covering Oklo. Notably, BNP Paribas Exane initiated coverage on July 27, further underscoring the rising interest in the company's prospects within the evolving energy landscape. This increased analyst attention typically translates to greater market awareness and potential investment inflows.

In contrast, NuScale Power received an “Equal Weight” rating from Barclays, accompanied by a $45 price target. While the firm acknowledges the limited number of public market investment options in the SMR sector, it also expresses caution regarding NuScale's current valuation.

Barclays suggests that NuScale needs to demonstrate improved execution to justify its stock price, a sentiment that may temper investor enthusiasm in the near term.

Other financial institutions have also weighed in on NuScale's prospects. Goldman Sachs initiated coverage on May 20, with a “Neutral” recommendation, reflecting a balanced perspective on the company's potential and challenges.

As of this morning's pre-market, Oklo's stock is trading 4.64% higher, whilst NuScale's stock is trading 4% higher than Friday's close. There could well be room for more than one winner in the space, with the demand for energy only growing.