Goldman Sachs(US:GS) Hua Er Jie Jian Wen·2025-09-25 05:35Core Viewpoint - Goldman Sachs suggests a neutral outlook on Oklo, indicating that while short-term stock price may be driven by catalysts, the current valuation appears "full" due to fundamental uncertainties [1]. Group 1: Market Position and Opportunities - Oklo is positioned in a favorable market with significant potential, benefiting from a nuclear energy revival and an AI-driven surge in electricity demand [6]. - The company has accumulated over 14 gigawatts of potential customer orders, leading the nuclear sector, with clients from various industries including data centers and oil and gas [6]. - Oklo maintains a good relationship with OpenAI, suggesting future collaboration opportunities [6]. Group 2: Financial Risks and Challenges - Despite a large customer reserve, all agreements are non-binding letters of intent, with no legally binding power purchase agreements (PPAs) signed to date [5]. - The company operates under a "hold and operate" model, requiring approximately $14 billion in capital by the mid-2040s, leading to high financial risk [7]. - Oklo's financing needs include about $4.2 billion in equity financing, posing a risk of ongoing shareholder dilution [7]. Group 3: Fuel Supply Constraints - The reliance on high-assay low-enriched uranium (HALEU) presents a significant supply chain challenge, with projected needs by 2035 equating to 3% of current global natural uranium supply, increasing to 12% by 2050 [8]. - Oklo is pursuing a multi-faceted fuel strategy, including a $1.7 billion fuel recovery facility, but these initiatives will take years to implement and add to capital burdens [8]. Group 4: Regulatory and Licensing Hurdles - Oklo plans to submit a combined operating license application to the NRC in Q4 2025, with an expected approval timeline of 24-36 months, though this is not guaranteed [9]. - The timeline for commercial operation of the first reactor is heavily dependent on NRC approval, with potential delays impacting revenue generation [9]. Group 5: Valuation Insights - Goldman Sachs assigns a neutral rating with a target price of $117, based on EV/EBITDA and discounted cash flow methods, highlighting that current valuation relies heavily on long-term forecasts [10][12]. - The valuation model indicates that Oklo's story is filled with potential, but significant funding, technical validation, and policy approvals are necessary to transition from vision to reality [10].