Oklo (OKLO 0.18%) had a tremendous year in 2025, with its valuation rising by 238% -- and that's with it experiencing a decline in the last few months. The company, which makes nuclear reactors and says it can recycle nuclear waste, has captivated investors who see it as a promising long-term energy investment.
There is significant risk with the stock, however. The company isn't generating any revenue yet, which also means that it's burning through cash. That trend may continue for a while. But with its growth potential, does the possible upside outweigh the risks with Oklo, and can this continue to be a good stock to own in 2026?
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Oklo's inevitable challenge: Raising money
The biggest risk with investing in a company that is burning through cash is that it's going to constantly need to raise money to fund not only its day-to-day operations, but also its expansion.
Last month, Oklo announced plans to raise up to $1.5 billion via the sale of its common stock through an at-the-market offering. Stock offerings dilute existing shareholders and can push stock prices down in a hurry, as supply can exceed demand in the market.
Over the trailing 12 months, Oklo has burned through $62.2 million from just its day-to-day operating activities. But that has increased over the years and could intensify further as it looks to scale and deploy reactors. Its first deployment may not come until next year.
For investors, this means that the main catalysts for driving the share price upward in the near future are likely going to relate to news, including progress on deployments and any deals it reaches, rather than financial results. That makes the stock a highly speculative investment to own.
Its high valuation could leave investors vulnerable
Oklo's share price is down more than 50% from its 52-week high of $193.84. But even though it's nowhere near its peak, its valuation still looks massive at around $14 billion. That's a high market cap for a business that isn't even generating any revenue today. The stock is primarily benefiting from the expectation that energy needs will be significant in the future due to artificial intelligence (AI) and that its reactors will help power data centers.
The problem with this kind of valuation is that it leaves investors with no margin of safety. Expectations will be high that demand will be strong and that Oklo should be able to generate strong revenue growth and profits in the future. If it falls short of expectations or there are even hints that things aren't going according to plan, the stock could be vulnerable to a massive sell-off.
NYSE: OKLO
Key Data Points
Oklo's stock could be due for more of a decline in 2026
Since November, Oklo has lost around one-third of its value. The weight of its valuation may be making investors think twice about whether the energy stock is worth its hefty premium.
I don't think the stock's valuation is justifiable, given all the question marks about the business and its future. If the stock market shows any signs of weakness this year, a highly priced stock such as Oklo could be among the hardest hit, given the risk it possesses. With no revenue and certainly no profit coming anytime soon, investors may be better off avoiding the stock.
Speculation rather than fundamentals fueled its gains last year, and I wouldn't count on 2026 being nearly as strong a year for the stock. Oklo's decline may just be getting started.
