Oklo, a developer of small modular nuclear reactors, has seen its stock soar over the past year.
Political support for the nuclear energy industry can benefit the company in the future.
The growth of data centers and radioisotopic production are two trends that can contribute to Oklo’s growth.
Amid the current renaissance in the nuclear energy industry, several stocks with exposure to this niche of the energy industry have logged considerable gains recently. Oklo (NYSE: OKLO), for example, has been on an absolute tear, soaring 559.6% as of this writing.
And there’s plenty of reasons to believe that the stock can continue to rocket even higher as enthusiasm for nuclear energy increases.
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While some growth stocks may log multibagger returns in a single year thanks to merely one catalyst, Oklo’s gains stem from several factors. Investors bid the stock higher in late 2024 when the company announced that it had received letters of intent from two data center customers for the deployment of its Aurora powerhouse small modular reactors. In total, the potential deals can provide up to 750 megawatts in capacity across the United States.
The company also announced a nonbinding agreement with Switch — a company that provides artificial intelligence (AI), cloud, and enterprise data centers — to deploy 12 gigawatts in Aurora powerhouse projects through 2044.
The start of 2025 also proved to be fruitful for the stock. With Sam Altman’s OpenAI announcing the Stargate Project in January, investors raced to purchase Oklo, recognizing that the OpenAI plan to develop data center infrastructure could be a potential boon for the company.
More recently, the executive orders that President Donald Trump signed in May aimed at reinvigorating the nation’s nuclear energy industry represented another catalyst for the stock. After decades of Washington’s disinterest in development of the nuclear industry, the Trump administration is clearly enthusiastic about its potential.
For prospective investors or current shareholders, it’s reasonable to question whether the stock can continue its meteoric rise. Simply put, the answer is a resounding yes.
With the extraordinary computing demands that generative AI is placing on data centers, AI companies are investing heavily in data center infrastructure. Research from Dell’Oro Group estimates that global spending is expected to soar from $430 billion on data centers in 2024 to $1.1 trillion by 2029. The interest that Oklo received last year from these developers will very likely extend through 2025 and beyond, helping to push the stock higher.
The political goodwill toward the nuclear industry will also benefit the stock. In early June, for example, Oklo notched another victory when the U.S. Nuclear Regulatory Commission agreed to review a report from the company, which could receive regulatory approval for licensing operators for the company’s Aurora powerhouse.
Oklo’s progress with its subsidiary Atomic Alchemy represents another factor that can lift the stock. In June, work began at a planned radioisotopic production facility in Idaho — just one of what management expects will be numerous projects that will expand its capabilities in commercial radioisotope production.
While not as widely discussed as data centers and AI, the market for radioisotopic production is expected to experience notable growth in the coming years. According to Credence Research, the market is projected to soar at an 89.7% compound annual growth rate from about $5.68 billion in 2024 to $953 billion in 2032.
Before clicking the buy button on the stock, it’s imperative for potential investors to recognize that there are bound to be bumps in the road. Disrupting an industry doesn’t come without some volatility, and there’s certainly no guarantee that Oklo will prosper as management imagines it will.
So, only investors comfortable with the inherent risks should consider a position. Those who have the resolve to stick with Oklo through the ups and downs may find themselves looking at a stock that provides a considerable return.
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Scott Levine has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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