The market has much to gain from nuclear power energy companies like Oklo.
- Oklo stock has gained 554.26% year-to-date since its IPO in 2024.
- Small Modular Reactors could be a $1 trillion potential market by 2050, reports suggest.
- Data centers could use more energy than Japan by 2026, says a Bank of America report.
- Nuclear energy will be a significant solution to keep abreast of the AI and energy race.
As the artificial intelligence revolution accelerates, it poses an unprecedented challenge to meet the staggering energy demands of a new generation of data centers.
“If global data center growth in 2030 vs. 2023 levels were its own country, it would be a top 10 global power consumer,” say analysts at Goldman Sachs.
Bank of America (BofA) reports suggest that “Data centers alone could use more energy than Japan by 2026 and India by 2030.”
This escalating need for more power has shifted focus to nuclear energy, which will be “critical in ensuring energy resiliency, national security and decarbonization,” according to BofA analysts.
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Who is Oklo?
Oklo (OKLO) , an advanced nuclear technology company, is thus positioned as a potential clean solution to the energy crisis.
It went public on the NYSE in May 2024 via a Special Purpose Acquisition Company (SPAC) merger with AltC Acquisition and has since seen its stock soar. On Monday, it reached a 52-week high of $142.85, a 553.3% increase year-to-date.
The company’s unique approach to energy production is centered on Small Modular Reactors (SMR), a nuclear fission energy solution with immense promise. With a potential market of $1 trillion by 2050, it is considered a cheaper, safer, and faster way to produce electricity.
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Oklo’s strategy is to build and operate its own small-scale nuclear power plants and sell power directly to consumers.
Its new recycling facility in Tennessee will repurpose used fuel from other nuclear power plants and will also fuel its Aurora Powerhouse nuclear factory at Idaho National Laboratory, Idaho.
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A first-of-its-kind, privately funded facility in the US, it will turn “waste into gigawatts, reducing costs, and establishing a secure US supply chain that will support the deployment of clean, reliable, and affordable power,” says Jacob DeWitte, Oklo co-founder and CEO, in an official statement.
Political and economic environment bolsters investor confidence.
Analysts at Wedbush recently raised the firm’s price target to $150 from $80 and kept an Outperform rating on Oklo’s shares.
The firm believes that in terms of focus on nuclear power for energy in the U.S, Oklo is “leading the sector” and positioned “very well for this wave of spending/growth/regulatory approval,” as reported at TheFly.
President Donald Trump, who aims to spur AI growth and propel the US to the forefront of global innovation, has been central to refocusing demand for nuclear energy with the recent Atlantic Partnership for Advanced Nuclear Energy with the UK.
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It will help next-generation nuclear companies like Oklo to expand in the UK and strengthen Oklo’s position as a key player in the clean energy transition sector.
However, the firm remains a classic high-risk, high-reward investment.
According to its Q2 reports, as a pre-revenue company, its $21 billion value estimates its future success and delivery, as it is currently operating at a loss.
While the company stock has been gaining momentum, it is yet to navigate regulatory hurdles and face the volatility of the tech industry.
Tech giants like Meta continue to invest billions of dollars to build data centers, and the demand for companies like Oklo is clear.
However, it remains to be seen whether it successfully delivers on its promise of clean, innovative, and affordable energy.
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