Imagine this. Last year, you opened a position in the nuclear energy stock Oklo (OKLO -5.27%). At that time, it had just merged with AltC Acquisition Corp, a special purpose acquisition company (SPAC) backed by OpenAI’s Sam Altman. You invested $10,000 when the share price was about $7. If you’d held on to your shares, how much would your investment be worth today?

Over $107,000 at today’s trading price (about $75). Yes, Oklo is one of the few energy stocks that has skyrocketed since last year — almost 1,000%. How exactly did that happen, and does Oklo still have a runway ahead? Short answer: I think it does, but there are significant challenges to overcome before this stock’s fundamentals match its value.

With that in mind, let’s take a closer look at the high-flying name in clean energy.

What does Oklo do?

In a nutshell, Oklo is a nuclear energy startup that wants to reinvent how nuclear energy is built and sold. It plans to do this through microreactors, which are compact fission plants that produce fewer megawatts of power than a traditional nuclear reactor.

The main advantage of a microreactor is that it’s small and modular. Unlike larger nuclear reactors, which can take a decade or more to build, microreactors can be assembled and installed in significantly less time, with estimates ranging from a few months to a few weeks or even days. They’re also grid independent, which makes them useful in places where energy is scarce and larger reactors would never be built, like remote towns, mining sites, or military bases.

A couple decades ago, an energy company with this much stake in nuclear energy would have seemed as cutting edge as a streaming company today trying to reinvent the VCR. But times have changed, and nuclear energy is now a leading power solution for AI technology, defense systems, urban grids, and space exploration, among others.

In the long term, Oklo wants to not only sell reactors but own and operate them. This would mean selling electricity through long-term contracts (read: recurring revenue), not unlike how utility companies work. The cherry on top? Oklo’s microrectors are designed to run on a cheaper, recycled fuel form called high-assay low-enriched uranium (HALEU). Lower fueling costs, plus the ability to recycle nuclear waste into usable energy, give Oklo a potential cost edge over traditional reactors and fossil fuels.

Why bulls are betting on Oklo (and bears are wary)

The bull argument for Oklo goes something like this: The company is a first mover in advanced nuclear, with strategic partnerships and a hefty cash position, and the expected strong demand for energy in the near future will give it a ready market when its reactors come online.

Chief among these partnerships is a deal with Equinix (EQIX -0.05%), the global data center giant. In early 2024, the company inked an agreement to buy 500 megawatts of future power from Oklo’s microreactors and preorder 20 microreactors. Although delivery of that half-gigawatt is likely several years away, a tentative order from a blue-chip client is a huge vote of confidence in the company’s ability to power the AI boom.

Oklo has also partnered with Diamondback Energy and Centrus Energy, the first of which has agreed to purchase 50 megawatts of power, and the second to sell HALEU to Oklo from the only facility in the U.S. licensed to produce it.

The momentum doesn’t stop there. In early 2025, it acquired the radioisotope producer Atomic Alchemy for about $25 million in stock. This deal, which closed in February, allows Oklo to broaden its reach into a market that will be worth an estimated $55.7 billion in 2026. That could give Oklo a small taste of revenue even before its reactors are up and running.

That last part is crucial. Oklo is a pre-revenue company, and it could be several years before it has the capacity to operate on a commercial scale. Worse, it doesn’t have regulatory approval for its designs. That puts it at a disadvantage to other advanced nuclear companies, like NuScale Power, which have passed some regulatory hurdles. While Oklo has enviable partnerships, the road from concept to functioning plants on the ground is long, and it’s still unknown if its reactors will perform as expected.

So, is Oklo a buy?

For risk-tolerant investors, maybe. Electricity consumption is expected to grow 4% annually through 2027, the same year when Oklo expects to flip the switch. And although it may not see substantial revenue growth until then, it has a hefty war chest — about $534 million in near-term liquidity — that could keep it humming until it does.

Still, the risks are palpable: pre-revenue, regulatory hurdles, and a lofty valuation, with its market capitalization approaching $11 billion. If you believe in its story and can stomach volatility, it could be worth an investment. If not, a lower risk nuclear energy exchange-traded fund (ETF) could be a better choice.

Shares of small nuclear reactor-builder Oklo (OKLO -3.45%) tumbled 3.1% through 12:10 p.m. ET Tuesday. Curiously, the news on Oklo today is good, not bad.

Cantor Fitzgerald initiated coverage of Oklo stock with an overweight rating and a $73 price target. No sooner had it done so than Oklo announced it has picked Kiewit Nuclear Solutions Co. to help build its first commercial Aurora powerhouse in Idaho, at Idaho National Laboratory (INL).

What Cantor says about Oklo

Let’s start with the initiation. As The Fly relates, Cantor is calling Oklo key to a global transition to safe nuclear energy. The company’s small module reactor technology relies on “proven” fast fission reactors, which should help with Nuclear Regulatory Commission approvals. Cantor expects Oklo to become a “big winner” in the transition to nuclear energy.

Moving next to the INL announcement, Oklo says “pre-construction” work on its new reactor will begin later this year, and “commercial operations [are] targeted for late 2027 to early 2028.” Importantly, Oklo also confirmed that it has secured access to the uranium fuel it will need to operate the reactor, and is making “regulatory progress” toward getting it design approved.

Is Oklo stock a buy?

And yet, investors don’t seem to be buying the argument — or the stock, at least not today. Why not?

Valuation’s probably one concern. Oklo stock costs $9.2 billion, yet the company has neither profit not even revenue on which to hang a valuation. While analysts do expect revenue to begin in 2027, in line with the “commercial operations” forecast, profits won’t arrive until 2030 at the earliest.

It’s hard to value a stock with so many unknowns, lasting so many years into the future. And it’s hard to call Oklo stock a buy because of this.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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