Shares of Oklo (OKLO 2.22%), the nuclear start-up that wants to make small nuclear reactors a "thing," fell nearly 7% in morning trading Wednesday before clawing back some of its losses in the afternoon.
As of 12:55 p.m. ET, Oklo stock remains down -- but only 1.4%.
Image source: Getty Images.
What spooked Oklo investors today?
Blame UBS for the early sell-off.
In a note on TheFly.com this morning, the Swiss megabanker initiated coverage of Oklo stock, but only with a neutral (i.e., not buy) rating, and with a price target of only $65 (which is about where Oklo trades right now).
UBS says it's "cautiously optimistic" that President Trump's series of executive orders issued in May will help spark a nuclear renaissance in the U.S. and help to create a $75 billion market for nuclear power plants and nuclear fuel. However, UBS needs to see further progress commercializing the technology -- not just performing R&D -- before it's willing to buy.
Is Oklo stock a sell?
Mind you, UBS isn't saying to sell Oklo stock (although you really might want to consider that). But the analyst does observe drily that Oklo's stock seems "elevated," which seems to me a clue to why UBS is holding off on buying.
The truth of the matter is it's very hard to say if Oklo's valuation is appropriate today. The company has no earnings on which to hang a P/E ratio. It has no free cash flow, either, nor even any revenue. Fact is, most analysts who follow Oklo don't expect the stock to do much of anything at all until 2027, when revenues might arrive, and earnings are as far away as 2030 in the best case.
Oklo stock remains speculation, pure and simple. Unless you like gambling, it's best to stay away.
