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Valued at a market cap of $831 million, NANO Nuclear Energy (NNE) is among the hottest stocks on the planet. It surged close to 40% in a single trading session yesterday, and has returned a staggering 488% since its IPO (initial public offering) in May 2024.
In the last month, NNE stock is up 410%, even after accounting for today's sharp 19% drawdown.
NANO Nuclear Energy operates as a microreactor technology company. It is currently developing products such as ZEUS, a solid-core battery reactor, and ODIN, a low-pressure coolant reactor. It is also developing a uranium fabrication facility to supply fuel to the nuclear reactor industry.
The worldwide transition towards cleaner energy sources, such as nuclear energy, is already accelerating as countries aim to fight climate change. Nuclear energy requires a power plant, also known as a nuclear reactor, to generate power. However, just a handful of companies have the expertise or the financial capabilities to set up, run, and operate these power plants, making NANO Nuclear Energy part of an expanding addressable market.
So, let’s see what’s driving the stock higher in recent weeks.
NANO Nuclear Energy Acquires Key IP
Earlier this week, NANO Nuclear Energy announced the acquisition of intellectual property used in small nuclear reactor cooling and heat transfer. The IP was acquired from Dr. Carlos Maidana, who has agreed to collaborate with the company to further develop the ALIP (annular linear induction pump) tech with a view to achieving SBIR (small business innovation research) III Award status.
NANO Nuclear disclosed it would provide funding and other resources necessary for the Phase III project, which is key to the micro nuclear reactor it is developing. NANO also believes the technology could be commercialized within the next 12 months as a component for liquid metal nuclear reactors.
Benchmark is Bullish on NNE Stock
Just a single analyst from Benchmark tracks the nuclear energy company, but the outlook from Michael Long is bullish.
In a note accompanying his price target hike to $39 from $15, Benchmark analyst Long explained, “NNE has enjoyed solid momentum since its IPO last month, with the U.S. Senate's 88-2 passage of the ADVANCE act last week, coupled with NNE's announced acquisition of ALIP IP for cooling and heat transfer for use in its ODIN SMR.”
In addition to these positive drivers, Long emphasized that the stock has surged over 400% since its IPO price of $4, reducing the cost of equity capital that Benchmark accounted for in its financial model. An improved capital positioning has produced the new price target of $39, which is 65% higher than current prices.
The analyst reiterated a “Buy” rating on NNE.
Is NNE Stock a Buy?
Similar to other pre-revenue companies, NANO Nuclear Energy is a high-risk buy. With roughly $16 million in cash, the company will have to raise equity capital within the next two years, given its operating losses totaled over $7 million in the last 12 months.
That said, investors with a high-risk appetite can consider gaining a small exposure to this disruptive, small-cap stock.
On the date of publication, Aditya Raghunath did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
