Even Elon Musk Now Admits Natural Gas Isn't Going Away. Here's What That Means for Nuclear Energy Stocks, Including NuScale Power and Oklo

Elon Musk said SpaceX will aggressively adopt natural-gas power as a bridge to solar, citing growing demand from rocket launches and scaling AI compute. The piece argues that renewed natural-gas interest could delay small modular reactor (SMR) adoption—potentially weighing on unprofitable SMR plays like NuScale Power (SMR) and Oklo (OKLO), where meaningful cash flows may still be years away. Bank of America frames nuclear as a long-run $10T opportunity, but near-term timing risk rises if AI data centers and other load can be met with natural gas first.

Analysis

The core market read is not that gas replaces nuclear permanently; it is that cheap dispatchable fuel can cover the first wave of AI/industrial load growth before SMRs reach bankable scale. That is a bad setup for OKLO and SMR because their equity cases are dominated by duration: every quarter of delay pushes out first cash flow, increases the odds of equity raises, and compresses the multiple investors will pay for pre-revenue optionality.

Second-order winners are the gas infrastructure stack: pipeline buildout, compression, gas-fired generation equipment, and lenders that finance behind-the-meter energy projects. If this is the template for other private operators, the trade is less about commodity price and more about capex allocation shifting from long-cycle nuclear commitments to faster, modular gas projects over the next 1-3 quarters. That favors midstream and service names more than pure E&Ps.

Contrarian view: the move may be over-read as a structural verdict against SMRs. Gas is a bridge fuel, not a durable moat, and the bridge gets less attractive if gas prices rise, carbon constraints tighten, or data-center buyers demand cleaner power contracts. What would falsify the bearish SMR thesis is tangible project conversion: signed PPAs, DOE support, or financing milestones within the next 1-2 quarters; absent that, the burden of proof remains on OKLO/SMR.

Key Decisions for Investors

• Short SMR/OKLO on strength over the next 1-2 trading sessions; look for 8-15% downside over 1-3 months if the market re-prices delayed commercialization and financing risk.
• Buy 3-6 month put spreads on SMR or OKLO to express the view with capped premium outlay; use any post-news pop to improve strike selection.
• Pair long NGS (or KMI/WMB as liquid midstream proxies) vs short SMR/OKLO for a 1-3 month relative-value trade if gas infrastructure spend is the nearer-term winner.
• Set a watch item on any announced PPAs, DOE loan guarantees, or project-finance updates from OKLO/SMR; those are the primary thesis-falsifiers and should trigger covering.
• If natural gas prices spike sharply, reconsider the short SMR/OKLO leg because the bridge-fuel advantage erodes and nuclear optionality regains scarcity value.