Investing.com -- Wolfe Research initiated coverage of X-Energy and Oklo on Tuesday, assigning both new nuclear companies Peer Perform ratings while expressing a clear preference for X-Energy based on its business model and ties to Amazon.

In a note from analyst Steve Fleishman, Wolfe framed both companies as emerging players in a nuclear renaissance driven by artificial intelligence and accelerating data center power demand.

Hyperscalers, the firm noted, have a "high willingness and ability to pay for power," and nuclear's baseload, dispatchable and carbon-free characteristics make it an attractive fit, with one caveat.

"It does not fit speed well and costs are still uncertain," Wolfe said.

Both companies are pre-revenue and each holds over $2 billion in cash. X-Energy counts Amazon as both a 5-gigawatt customer and a 17% investor, and is designing reactors for deployment in the early 2030s.

Oklo is pursuing a vertically integrated model and is targeting its first Aurora reactor in Idaho by 2028, which Wolfe said makes it a higher-risk, higher-reward proposition. "OKLO feels like the higher reward, higher risk play," the firm wrote.

Wolfe flagged HALEU fuel supply as a key bottleneck for both companies, calling it a more pressing constraint than the regulatory environment under the current administration.

The firm views the overall sector cautiously, describing it as a "big opportunity, but little room for disappointments."