Several years ago, nuclear energy investments were a rarely discussed niche of the renewable energy market that held little promise for serious growth.
Boy, have things changed.
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Today, escalating generative artificial intelligence (AI) usage and other sorts of AI computing are starting to strain the electrical grid. Fretful of how they will ensure adequate power supply, AI companies are investing heavily in data center infrastructure.
Couple this with the fact that nuclear companies are making steady progress toward making their small modular reactors commercially viable, and it's no wonder why Oklo (OKLO 1.28%) stock has soared 940% over the past year.
A tide of catalysts has helped buoy Oklo stock higher
Over the past year, investors have consistently celebrated Oklo's success in growing its backlog. In November, it announced it had received letters of intent from two customers to deliver up to 750 megawatts of power for data centers across the U.S. The following month, Oklo announced an agreement with Switch, an AI data center developer, to deploy 12 gigawatts of Oklo's Aurora powerhouse projects through 2044.
Contributing further to Oklo stock's rise -- and the rise of other nuclear energy stocks -- President Donald Trump signed executive orders last May that are intended to spur development of the nuclear energy industry.
Can Oklo stock continue to soar over the next year?
While Oklo stock has skyrocketed higher over the past year, shares can certainly maintain the same upward trajectory. Unlike NuScale Power, Oklo doesn't have a design approved by the U.S. Nuclear Regulatory Commission. Should the company make substantial progress toward receiving the requisite certifications, it's likely that Oklo stock will race higher. Similarly, if Oklo inks more agreements with data center companies, investors will likely bid the stock higher.
Despite the potential for shares to continue rising, investors should recognize the fact that the company's not generating revenue and there's no certainty that, if it does, it will subsequently generate profits. Those looking to mitigate those considerable risks may be more interested in a nuclear energy exchange-traded fund (ETF) to gain industry exposure.
