One standout stock in the energy sector on Thursday was next-generation nuclear company Oklo (OKLO 0.12%). Its shares closed the trading session up 4%, trouncing the bellwether S&P 500 index's barely over 1% gain. A new supply agreement was the key catalyst behind that price rise.
The nuclear option for a social media king
Before market open that day, Oklo and nuclear fuel supplier Centrus Energy Group unveiled a letter of intent, under which Centrus will provision up to five powerhouses currently under construction in southern Ohio.
Image source: Getty Images.
Those small nuclear reactors (SMRs) will be used to supply power for data centers owned by social media company Meta Platforms, the owner of Facebook, Instagram, and WhatsApp. The SMRs are presently being built by Oklo in partnership with Meta.
The letter of intent stipulates that Centrus will supply sufficient quantities of high-assay low-enriched uranium (HALEU) for Oklo's Ohio project. Deliveries of the nuclear fuel will begin in 2029, and last for "multiple years." The two companies didn't put a number, or even a range, on that time frame. They also didn't provide detailed financial particulars of the arrangement.
NYSE: OKLO
Key Data Points
Justifiably happy with the headline
The Meta project is critical, high-profile work for Oklo. As such, any agreement or contract that pushes it forward is a boon to the company's fortunes, and this letter of intent -- although it's not as strong or durable as an official supply contract -- certainly qualifies.
Investors buying into Oklo on Thursday were right to be satisfied with this news, and I share their bullish view of the company's potential.
