Oklo's (OKLO 0.70%) stock has hit a rough patch.
After soaring by 720% since Jan. 1, the nuclear start-up's shares hit a high of $174.14 on Oct. 14. Then they tumbled by more than 50% to a low of $85.77 on Nov. 25. Since then, they've rebounded moderately to about $105.
Is there still time for investors to buy this dip, or has the stock risen too far, too fast? Here's what to know if you're considering taking a stake in Oklo.
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There's a lot we don't know
When you consider investing in an established energy-generation company, there's a whole world of data points available to help you determine whether or not it's a good investment.
If it's a U.S.-based company -- like Oklo -- you can review quarterly earnings reports that tell you how much money the company is making, how much it's spending on various types of expenses, and how much it's booking in profit. The company will also provide details on its operations: how much electricity it produced at which facilities, at what capacity those facilities were operating, and how much downtime each one had during the quarter.
Because Oklo is in the pre-commercial phase of its operations, though, it's not supplying most of that incredibly helpful information.
Oklo still publishes quarterly earnings reports -- it's required to do so by the Securities and Exchange Commission. But because it hasn't begun commercial operations, it has no revenue and no profits, and its expenses are mostly start-up expenses. Its spending profile will likely change dramatically once it is able to start manufacturing its nuclear reactors, and once those power generation facilities come online.
In other words, we know what Oklo plans to do, but we can't tell how well it's going to work out. That's why the stock is incredibly speculative and should only be considered by extremely risk-tolerant investors.
The best-case scenario
Currently, Oklo is in the process of building its first Aurora Powerhouse facility, which will house a sodium-cooled fast reactor that's also a small modular reactor (SMR).
SMRs have never been successfully deployed in the U.S., but several companies are currently trying to develop them as alternatives to the massive reactors that currently power the U.S.'s sprawling nuclear power plants. They will almost certainly have smaller generation capacities, but they would also have much smaller footprints and could thus be more easily deployed closer to population centers.
Oklo is the only company developing a sodium-cooled, fast SMR, however. This technology was proven to be effective in a large reactor core, and allows the reactor to operate more efficiently and to be powered by fuels other than enriched uranium. Oklo believes its fast reactor could be powered by spent nuclear fuel from existing reactors, which would be an abundant fuel source far cheaper than enriched uranium.
In its third-quarter update presentation, Oklo did not offer a firm timeline for when it expected its first Aurora Powerhouse to begin commercial operations. In the past, management has said it was targeting late 2027 or early 2028. Now, citing the project's participation in the U.S. Department of Energy's Reactor Pilot Program, Oklo only notes that the program's target is to achieve "criticality by July 4, 2026 or as soon as possible."
Investors who buy in now will have to wait at least six months -- and probably more -- before they even find out if Oklo's business plan will work.
In the meantime
So if we don't know anything about how Oklo will perform as a commercial company, and we won't know anything for months or years, why is the stock oscillating so widely?
NYSE: OKLO
Key Data Points
Well, in the absence of any factual data on which to base their decisions, investors are reacting to news, to updates from the analysts following the company, to how other SMR companies are doing, and sometimes just to how they feel on a particular day. For example, one of the biggest drops in Oklo's share price came after one of famous investor Cathie Wood's ETFs sold about one-third of its stake in Oklo. Oklo's stock dropped 30% over the following week, even though Wood's ETF still held a multimillion-dollar stake in the company.
So, investors who buy Oklo stock now should expect the share price to continue to swing wildly, and without warning, making it impossible to tell whether it will be higher or lower than $100 at any particular point in the future.
However, if the company can achieve its three upcoming milestones of: 1) completing the Aurora Powerhouse construction, 2) achieving criticality of its prototype SMR, and 3) receiving regulatory approval for its Aurora Powerhouse, it's likely the market will react favorably.
Whether investors want to wait for it to hit some or all of those milestones -- or buy in sooner and risk that something might derail Oklo's plans in the meantime -- is up to them.
