Oklo (NYSE:OKLO), a nuclear energy startup supported by OpenAI’s Sam Altman, has increased more than 6x in the past 12 months. The stock has also risen by over 55% in the last month. So what factors are contributing to these gains? And is Oklo stock still a viable investment at the current price of around $63 per share?
Advanced Nuclear Tech With a Compact Footprint
Oklo is developing compact, fast-spectrum microreactors designed to provide clean, safe, and affordable power. The company’s Aurora line of reactors targets a power capacity between 15 and over 100 megawatts. This marks a significant shift from traditional nuclear power plants in the United States, which typically have a capacity of about 1,000 megawatts. This results in a much smaller and more adaptable footprint. The reactors employ fast neutrons and liquid-metal cooling, sidestepping the intricacies of high-pressure systems while enhancing fuel efficiency and safety. A notable innovation from Oklo is the utilization of recycled nuclear waste as fuel, converting a longstanding obstacle into a precious clean energy resource. With 10-year operational lifespans and no need for on-site fuel management, these microreactors could be ideally suited for remote and high-demand applications such as AI data centers, industrial facilities, and defense establishments.
Strong Electricity Demand, Regulatory Tailwinds
Electricity demand is projected to increase significantly in the coming years, and nuclear energy is developing as an attractive solution. Unlike intermittent renewable sources like wind and solar, nuclear power provides clean, consistent, around-the-clock energy. The tech sector is quickly expanding data centers to cater to the energy-intensive requirements of generative artificial intelligence, while President Trump’s substantial domestic manufacturing initiative and a wider transition toward electrification continue to elevate power requirements.
The government has also been providing favorable support. Recent executive orders from President Trump aim for a fourfold increase in nuclear capacity from 100 GW to 400 GW by 2050. Importantly, the Nuclear Regulatory Commission is undergoing streamlining, with new regulations mandating reactor licensing decisions within 18 months. These adjustments are intended to accelerate the rollout of advanced technologies like those developed by Oklo. Additionally, the U.S. Department of Defense is becoming a growing customer, engaging the company to provide its innovative nuclear reactor technology to power the Eielson Air Force Base in Alaska.
Unique Risks
Valuing Oklo presents a challenge. Its financial metrics are not substantial at this point, as it remains a pre-revenue enterprise. The strategy involves constructing, operating, and directly selling electricity to clients through long-term agreements, with plants anticipated to begin operations around 2028 to 2029. Until that time, the company will be consuming significant cash to finance research, development, and regulatory initiatives — without any commercial revenues to cover these expenses. This could lead to pressure for additional capital, which might dilute existing shareholders or necessitate taking on debt. Even once the technology is validated and implemented, scaling up manufacturing will pose a major challenge — one that has hindered numerous high-profile startups. The progression from prototype to mass production frequently presents its own array of technical and operational obstacles.
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