Shares of Oklo (OKLO 8.64%) are climbing on Monday, up 11% as of 1:30 p.m. ET. The spike comes as the S&P 500 is up 0.3% and the Nasdaq Composite is up 0.6%.
The nuclear energy company working to develop small modular reactors (SMRs) announced last week that it has been selected by the U.S. Department of Energy for another pilot program.
The DOE picks Oklo
Oklo will join the DOE's Advanced Nuclear Fuel Line Pilot Project aimed at advancing nuclear fuel technology. The company will "build and operate three fuel-fabrication facilities to support the deployment of advanced reactors."
This follows its inclusion in a similar DOE pilot program and comes at a time when artificial intelligence (AI) data centers are straining the energy grid. SMRs like those that Oklo is developing could satisfy the growing demand for power.
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Oklo still has to prove itself
Nuclear energy is experiencing a renaissance, and with its compact fast reactor design, Oklo is well positioned to meet the needs of power-hungry AI data centers, especially given its connection to OpenAI. However, the company still has to develop the tech and prove it is viable.
The company's valuation is becoming quite lofty, which makes me nervous. I do think it still can be justified if it delivers on its promise, so if you have a high risk tolerance, Oklo is a solid pick, but know there are some pretty fundamental hurdles still to clear.
