Oklo Conducts Plutonium Criticality Test with Los Alamos, Highlighting Technical Progress Amid Persistent Risks

What happened

Oklo has announced a multi-day plutonium fast reactor criticality experiment in partnership with Los Alamos National Laboratory at a DOE facility, aiming to advance its Aurora reactor technology. This collaboration under a Strategic Partnership Project supports ongoing R&D efforts but occurs against a backdrop of no revenue, no licensed design, and only non-binding power purchase agreements. Recent filings show the company burning cash with negative free cash flow and a net loss of $64.2M in the first nine months of 2025, despite holding $1.18B in cash and securities. The market values Oklo at approximately $12.8B, implying high expectations for regulatory success and commercial deployment after a >3x share price run. However, this technical milestone does not address core risks such as NRC licensing delays, the conversion of LOIs to binding PPAs, or the need for substantial additional capital.

Implication

The experiment enhances Oklo's technical credibility and could provide data to support future NRC submissions, yet it does not accelerate revenue generation or reduce dependency on unproven regulatory pathways. Investors should note that Oklo's cash burn remains high, with liquidity likely insufficient for first-of-a-kind reactor construction without further dilutive financing. The stock's elevated valuation already prices in significant success, leaving limited upside and high vulnerability to setbacks in licensing or PPA conversions. While partnerships with national labs are strategically beneficial, they do not alter the binary nature of outcomes where delays could lead to permanent capital loss. Therefore, maintaining a cautious stance is warranted, as this news does not justify a shift in investment thesis without more substantive commercial milestones.

Thesis delta

The criticality experiment reinforces Oklo's technical development efforts but does not materially change the investment thesis, which remains centered on unresolved regulatory and commercial risks. Key watch items—such as NRC licensing progress, binding PPA conversions, and cash burn management—are unaffected by this announcement. Thus, the potential sell recommendation stands, with no shift in the risk-reward assessment given the pre-revenue status and high valuation.