For the last few years, artificial intelligence (AI) stocks in the software and semiconductor industries have witnessed outsized market-beating returns. What investors may not fully realize, however, is that there are adjacent opportunities to pure-play technology businesses floating around the AI realm.
One pocket that has started receiving some attention is nuclear energy. In particular, a company backed by OpenAI CEO Sam Altman called Oklo (OKLO 2.11%) has emerged as something of a darling at the intersection of AI and nuclear power.
With that said, trading activity from Ark Invest's Cathie Wood shows that she's been trimming her Oklo position in recent months. Between Oct. 21 and Feb. 12, Ark Invest sold over 335,000 shares of Oklo in the ARK Autonomous Technology & Robotics exchange-traded fund (ETF).
Let's exoplore what may have compelled Wood to sell Oklo stock and why it makes sense to avoid Oklo despite its rising popularity today.
Why might Cathie Wood be trimming Ark's position in Oklo?
The chart below illustrates Oklo's share price movement over the last six months. Since mid-August, shares of Oklo have ballooned by 500% as of this writing (Feb. 19).
Just in the month of January, Oklo stock soared by an astounding 96% thanks in large part to Altman's direct influence on President Trump's $500 billion AI infrastructure initiative, dubbed Stargate.
Oklo is a pre-revenue business and isn't expected to begin scaling for a couple more years. Until then, an investment in Oklo parallels that of a cash-burning start-up.
The company's valuation expansion over the last several months is nearly all tied to a positive narrative surrounding AI -- not necessarily direct operating results from Oklo specifically.
Given its rapid ascent in such a short timeframe, my hunch is that Wood decided to take some easy profits off the table. That said, there may be a more savvy reason behind this decision.
Image source: Getty Images.
History is on Wood's side, and that might not change
NYSE: OKLO
Key Data Points
Oklo went public through a special purpose acquisition company (SPAC) operated by Sam Altman -- hence his direct influence on the company's board of directors.
While SPACs experienced some fleeting popularity a couple of years ago, the historical trends surrounding these vehicles are overwhelmingly clear.
According to a study conducted by the University of Florida, SPAC stocks generated negative returns of 46% and 58% for one year and three years following the de-SPAC announcement. To make matters even worse, one of the poorest performing sectors following a de-SPAC was renewable energy, which saw a negative 84% median de-SPAC return between 2009-2024.
While history is not a guarantee of future results, investors should acknowledge that Oklo has already witnessed an unprecedented rise. The company has the luxury of a high-profile backer such as Altman, and it is being dragged into a broader melt-up driven by macro tailwinds tied to nuclear power's rising influence on the AI movement. Just look at the returns of the two nuclear-powered thematic ETFs below. The top holding in the Range Nuclear Renaissance Index is, perhaps ironically, Oklo.
In my eyes, the activity around Oklo ties closely to that of a meme stock. If anything, Oklo appears to be a stock that rides the momentum in excessive enthusiasm.
Investors interested in gaining exposure to nuclear energy stocks as a different angle to play the AI movement are better off looking at more established players. For now, Oklo is still too speculative and not a stock for risk-averse investors.
