Shares of Oklo (OKLO 1.17%) are rising on Tuesday, up 6.4% as of 2:07 p.m. ET. The move comes as the S&P 500 (^GSPC -0.16%) gained 0.2%, while the Nasdaq Composite (^IXIC -0.76%) lost 0.3%.
A string of positive news stories from the past several weeks, including a new buy rating from Canaccord Genuity analysts and the company's selection by the Department of Energy (DOE) to participate in a new pilot program, is lifting shares of the nuclear energy company.
A positive review
The investment bank Canaccord Genuity initiated coverage of Oklo last week. In its first analysis, Canaccord gave Oklo stock a buy rating and set a price target of $175.
The company was also just selected for its second DOE pilot program. The Advanced Nuclear Fuel Line Pilot Project will see the company "build and operate three fuel-fabrication facilities to support the deployment of advanced reactors." It was also selected for the DOE's Energy Reactor Pilot Program.
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Oklo has a long road ahead
With the artificial intelligence (AI) data center expansion continuing to accelerate, the U.S. electrical grid is strained. Oklo's reactors could help solve this; its small model reactors (SMR) are a great fit to power data centers directly.
But the company is still developing the technology. And even if it successfully does, this is an incredibly capital-intensive space. Oklo will have to finance the construction of these reactors, which will mean either taking on significant debt or diluting shareholders.
