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Nuclear Aspirations Hit Reality Check: Oklo and NuScale Plunge on BofA Downgrade

  • Nishadil
  • October 01, 2025
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  • 2 minutes read
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Nuclear Aspirations Hit Reality Check: Oklo and NuScale Plunge on BofA Downgrade

The burgeoning promise of small modular reactors (SMRs) just received a hefty dose of market reality, as investors in nuclear energy startups Oklo (OKLO) and NuScale Power (SMR) witnessed a sharp decline in their portfolios. Fueling this dramatic downturn was a decisive double-downgrade issued by Bank of America, which slashed both companies from a 'Buy' rating straight to 'Underperform,' sending shockwaves through the nascent sector.

The impact was immediate and severe.

Oklo, a company yet to generate revenue, saw its shares plummet by a staggering 25%. NuScale Power, a more established player in the SMR space, also felt the brunt, with its stock dropping over 10% in a single trading session. The core of BofA's argument, as articulated by analyst Andrew Spencer, centers on a stark assessment: current valuations for both companies are simply "running ahead of reality."

For Oklo, the concerns are particularly acute.

Having recently entered the public market through a Special Purpose Acquisition Company (SPAC) merger, the company commands an eye-watering valuation reported around $4.7 billion. Bank of America highlights the fundamental disconnect between this lofty market capitalization and Oklo's pre-revenue status.

Analysts suggest that such a valuation is built on a foundation of too many variables and unproven assumptions, setting the stage for increased share price volatility as initial SPAC investors look to cash out.

NuScale Power, while further along in its development, is not immune to these valuation anxieties.

BofA's analysis pointed to the company's cost-plus model and a significant reliance on governmental funding and support, which introduce inherent risks. The ghost of the canceled UAMPS (Utah Associated Municipal Power Systems) project looms large, serving as a potent reminder of the fragility and long timelines associated with large-scale nuclear energy initiatives.

Despite a rally that followed a previous critical short report, Bank of America now sees substantial downside risks persisting for NuScale.

This widespread downgrade underscores a growing skepticism regarding the rapid ascent of these SMR pioneers. While the potential for small modular reactors to revolutionize energy production remains immense, the path to commercialization is fraught with technological, regulatory, and financial hurdles.

Bank of America's move serves as a powerful reminder to investors that even the most innovative and promising technologies must eventually contend with the cold hard facts of financial reality and sustainable business models. For Oklo and NuScale, the honeymoon period appears to be over, replaced by a demanding market scrutinizing every promise against the backdrop of current financial performance and tangible progress.

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