Shares of Oklo Inc (NYSE:OKLO) were climbing in early trading on Thursday, after the nuclear startup announced a long-term agreement with Switch.

The company's business model positions it in a "solid spot" for long-term recurring revenues, according to Wedbush.

Analyst Daniel Ives initiated coverage of Oklo with an Outperform rating and a price target of $26.

Ives noted the company's unique business, which brings small modular reactors (SMRs) directly to its customers.

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Oklo, backed by OpenAI CEO Sam Altman, has a differentiated business model in that it "sells power, not the reactors, directly to customers under long-term contracts which in turn provide long-term recurring revenues and a streamlined regulatory pathway," the analyst stated.

The company aims to develop its first SMR by 2027, which will be a fast fission reactor that is cooled by liquid metal sodium, with HALEU (High-Assay Low-Enriched Uranium) as a fuel, "which has proven itself as a superior fuel to traditional LEU for its ability to generate further power over time while minimizing waste," he added.

"The AI Revolution is driving significant demand for clean energy to power AI initiatives with necessary computing power expected to grow 10x by 2030 putting OKLO is a great position to capitalize on this elevated demand," Ives further wrote.

Price Action: Shares of Oklo had risen by 2.4% to $18.80 at the time of publication on Thursday.

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Image: Courtesy of Oklo, Inc.