Shares of Oklo (OKLO 9.49%) jumped on Tuesday, finishing the day up 9.2%. The spike came as the S&P 500 and Nasdaq Composite gained 1.1% and 1.3%, respectively.
Oklo stock started the day down, having dropped in aftermarket trading following Monday's release of its latest quarterly earnings. However, news that the Department of Energy (DOE) has tapped the nuclear energy start-up for a key federal program led to a sharp reversal and the day's gain.
DOE calls on Oklo
Late Monday, Oklo released its second-quarter results showing a net loss of $24.7 million or $0.18 per share for the pre-revenue start-up. Although this was an improvement year over year and in line with expectations, investors were frustrated by the lack of clarity in its development timeline.
That frustration was quickly overshadowed, however, when the Department of Energy announced a new initiative exploring the deployment of advanced nuclear reactors at U.S. national laboratories with the goal of having at least three operational by mid-2026. Oklo was one of 11 companies selected. That target is, however, much more aggressive than Oklo's own stated timeline for full commercial operations by late 2027 to early 2028.
Image source: Getty Images.
Investors seemed to believe this could mean that Oklo's true commercial timeline is faster than previously stated.
Still early days for this nuclear contender
Despite today's optimism and the validation of being selected by the DOE, OKLO is still a company developing new technology. It's a long road to full commercial operations, and many hurdles lie ahead.
That being said, Oklo is well funded and has key connections to the artificial intelligence (AI) industry -- OpenAI's Sam Altman is a major backer. For investors with a high risk tolerance interested in alternative nuclear investments, Oklo is a good pick.
