As the demand for computing power surges, driven by the rapid expansion of artificial intelligence and cloud-based services, energy consumption from data centers is skyrocketing. This escalating requirement for reliable and sustainable energy sources is prompting innovative solutions in the energy sector, highlighting the critical role of advanced technologies in meeting future power needs.
Oklo Inc's (NYSE:OKLO) next-generation small nuclear reactors (SMRs) offer a "scalable solution" to the data center power crunch, according to BofA Securities.
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The Oklo Analyst: Analyst Dimple Gosai initiated coverage with a Buy rating and price target of $92.
The Oklo Thesis: The company is "well positioned to meet the rising energy needs of AI," Gosai said in the initiation note.
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A report by Gartner estimates power demand from AI to be 2.6X of today's consumption by 2027, "with shortages threatening up to 40% of data center sites," she added.
Oklo has among the largest publicly disclosed customer pipelines, with more than 14 gigawatts (GW) of MOUs, which represents around 30% of the global pipeline, the analyst stated. This includes a 12 GW multi-site agreement with Switch, she noted.
Oklo's partnership with Liberty Energy could enable earlier monetization and smooth the path to SMR deployment, Gosai said.
"In our view, formalized hyperscaler agreements represent the most material near-term catalysts for the stock," she further wrote.
OKLO Price Action: Oklo shares were up 3.67% at $73.80 at the time of publication on Tuesday, according to Benzinga Pro data.
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