Key Points
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Oklo develops advanced Aurora powerhouses that require next-generation nuclear fuel (HALEU).
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Centrus is the only company with an approved facility for HALEU production.
This month, nuclear energy companies Oklo (NYSE: OKLO) and Centrus Energy (NYSE: LEU) have agreed to pursue discussions on a joint venture focused on deconversion services for high-assay, low-enriched uranium (HALEU), as well as advancing related supply chains and fuel-cycle technologies.
These two companies figure to play prominent roles as the United States expands its nuclear energy capabilities, but if you are considering investing, one stands out as a better buy today.
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Image shows two cooling towers at an energy facility against a blue sky backdrop.
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Oklo’s reactors require next-generation nuclear fuel
Oklo is an early-stage nuclear energy company that develops advanced fission power plants called Aurora powerhouses. These powerhouses are built on liquid-metal cooled-sodium fast reactor technology based on the Experimental Breeder Reactor-II (EBR-II), which operated for over 30 years at the Idaho National Laboratory (INL) before being shut down in 1994.
In January, Oklo entered an agreement with Meta Platforms to develop a 1.2 gigawatt (GW) power campus in Ohio. As part of the agreement, Meta will prepay for power, providing Oklo with upfront capital to advance the project. The first phase is targeted for 2030, and it will eventually scale up to the full 1.2 GW capacity by 2034.
Oklo’s Aurora powerhouses use high-assay, low-enriched uranium, a next-generation nuclear fuel with enrichment levels higher than that of traditional low-enriched uranium (LEU) used in today’s nuclear power plants. You can think of it as premium fuel for next-generation microreactors. This is where Centrus comes into the picture. The company is the only one with an enrichment facility approved by the Nuclear Regulatory Commission to produce HALEU enriched up to 20%, giving it a first-mover advantage.
Currently, Centrus procures low-enriched uranium (LEU) used in today’s reactors and sells it to customers. One of its providers, TENEX, is a Russian-based entity that Centrus will need to move away from when the Prohibiting Russian Uranium Imports Act (signed in May 2024) goes into full effect in 2028. To secure domestic production of these key fuels, Centrus aims to be an enriched uranium producer at its Piketon facility in Ohio.
The company was recently awarded a $900 million task order from the U.S. Department of Energy to expand its Ohio facility and projects that the first new production cascade (a series of centrifuges used to enrich uranium) at Piketon will be operational in about 3.5 years.
Which nuclear energy stock is right for you?
Oklo and Centrus face different hurdles. For example, Oklo’s Aurora Powerhouse at the Idaho National Laboratory isn’t set to operate until late 2027 at the soonest, although infrastructure delays for a project of this type aren’t out of the question. In contrast, Centrus is already profitable and currently sources and sells LEU, but it will require significant capital expenses to expand its Ohio facility and become a domestic producer of both LEU and HALEU.
Both stocks benefit from positive developments in the nuclear energy industry and the push to expand nuclear power. Oklo is still far from generating an operating profit, and its timeline for commercial operations is still years away. Centrus has a lot of work ahead of it as well, but its business is established and profitable, making it a better nuclear stock for investors to buy today.
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Courtney Carlsen has positions in Centrus Energy. The Motley Fool has positions in and recommends Meta Platforms. The Motley Fool has a disclosure policy.
