Oklo (OKLO 3.88%) is one of several companies seeking to change how nuclear power is generated. One of the biggest benefits of Oklo's technology is that its reactors are designed to use recycled nuclear fuel. The U.S. government is interested in the technology, and Oklo already has a power supply deal with Meta (META 2.41%) for a reactor project that is still in development. But should you buy Oklo, thinking it will turn you into a millionaire?
Oklo's stock has been a rollercoaster ride
The graph below has two sides. In the first part, the stock is steadily rising, reaching a peak gain of around 470%. The second part is a steady decline, leaving the stock with a gain of around 100% over the full period.
It is hard to complain about a 100% gain over a 52-week span, but sticking around as the stock lost nearly two-thirds of its value would likely have been difficult for most investors. And that doesn't even consider the five drawdowns of around 20% before the stock began to head steadily lower. This is a stock that only the most aggressive growth investors should consider buying.
Image source: Getty Images.
The opportunity could be material but there's still a lot of work to be done
The rise in Oklo's stock price was driven by emotion. It came at a time when investors were excited about nuclear power and nuclear power stocks. At the leading edge of the nuclear power industry, technology-wise, Oklo was caught up in the excitement. That's not unjustified but the stock clearly got ahead of itself, given the swift and dramatic retreat from the 52-week highs.
NYSE: OKLO
Key Data Points
Oklo is a money-bleeding upstart. And it will likely remain so for years to come, as it spends heavily to build out its business. In fact, the Meta deal is really a funding agreement, with Meta pre-paying for power so that Oklo can use that cash to build its Ohio generating facility. There are material risks here that go well beyond the volatile stock price, notably including the company's execution on a key construction project.
Most investors should watch from the sidelines
If Oklo's Ohio facility works as planned and the company's nuclear power technology catches on, it could be a millionaire-maker stock. However, that outcome is far from certain at this point, given the company's still early stage of development. If you are interested in the technology, you should probably put Oklo on your wishlist instead of your buy list for now.
