Nuclear technology is enjoying something of a renaissance right now. Countries around the world are looking to expand or revitalize their nuclear infrastructure.
The power needs of artificial intelligence (AI) is a problem nuclear energy is uniquely well-equipped to solve.
And the bleeding edge of nuclear fission is the small modular reactor (SMR). These pint-sized nuclear reactors function very similarly to their full-sized counterparts but take up a fraction of the space.
Companies like Oklo (OKLO +5.72%) are pioneering SMR technology, but are they ready for prime time, or should you pass them over for now? The answer is at once simple and complex.
Image source: Getty Images.
Call it heavy metal
Oklo's technology is unique among SMR companies. Its main focus is on liquid-metal cooling, which uses liquid sodium as a coolant instead of the pressurized water used by conventional reactors.
Dubbed "fast reactors," they are considerably more fuel-efficient than their water-cooled counterparts and produce less waste. They can also handle higher temperatures and require lower pressure to run.
However, they are far less proven and tested than conventional water-cooled reactors, and the liquid metal causes more rapid corrosion of components and costs more to construct. Liquid sodium in particular can be incredibly volatile when exposed to air or water, so it's more difficult to handle than water.
It's a trade-off, and one Oklo falls on the side of liquid-metal cooling's greater efficiency.
Oklo's Aurora SMR is designed to use liquid sodium and generate 75 megawatts of power to the area around it. Like all other SMRs, the Aurora is still in the design stage, but it has seen some interest from the U.S. government.
Last year, the Air Force partnered with Oklo to build a microreactor at the Eielson Air Force Base in Alaska. The deal came with a 30-year fixed-price contract. The Aurora plant is targeted for completion in 2027 or 2028.
NYSE: OKLO
Key Data Points
So, the technology is incredibly cool. But what's the catch? Oklo's revenue or utter lack thereof. The company generates no revenue at all and likely won't for a few years.
Until some Aurora reactors are up and running, generating electricity for data centers, military bases, and whatever else, the company is totally dependent upon investor dollars and government contracts.
It's not all bad, mind you; the company has a positive cash position and a debt-to-equity ratio of 0, so it's not like Oklo is underwater. The company has tons of potential, but right now any investment is purely speculative.
That's illustrated beautifully by the company's run last year. From May to October, it surged 540% before crashing back down 73%.
It's back up 55% since then, but until Oklo has a steady stream of revenue, I will not be investing any of my own money in it, and investors should consider carefully before investing yourself.
