On news of a fresh contract signing with a branch of the U.S. military, investors piled into the stock of nuclear energy start-up Oklo (NYSE: OKLO) on Wednesday. That surge in interest blasted the stock higher by almost 30%, on a day when the S&P 500 index dipped by 0.3%.
Going nuclear
Wednesday morning Oklo announced, no doubt with great pleasure, that it had received a notice of intent to award (NOITA) for a project in Alaska. The company was notified by the government’s Defense Logistics Agency on behalf of the Air Force and the Department of Defense. The project is for the supply of nuclear power to Eielson Air Force Base in Alaska.
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The project would see Oklo design, build, and operate an energy-generating facility to supply power and heat to the base. One of the key selling points of the company is that, being nuclear, its power-generating assets can operate off the traditional electricity grid — an appealing proposition for remote sites like Eielson.
This didn’t exactly come as a surprise to the company or its investors. Late last year, management divulged that it had been provisionally selected for the Eielson project. In its formative stages, however, the project experienced numerous delays because of protests from other applicants, so this is a major step forward.
In its press release touting the deal, co-founder and CEO Jacob DeWitte said it “reflects continued confidence in Oklo’s ability to deliver clean and secure energy solutions for mission-critical infrastructure.”
The company did not specify the financial terms of the arrangement.
A big step for the company
It’s also an important milestone for Oklo, which hasn’t yet built any of its nuclear powerhouses. Having a branch of the military as an early client is also a massive confidence builder not only for the company, but for the next-generation nuclear technology that is its specialty.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
