By October 2024, Oklo Inc. (NYSE: OKLO) found itself at the intersection of several growing trends, which, combined, enabled the nuclear energy stock to experience one of the most impressive rallies of 2024.
OKLO shares are, with their October 22 pre-market price of $22.48, a staggering 169.42% in the green in the last 30 days. The rally has been continuously strong, as evidenced by the 54.16% rise in the last 5 days and the 22.38% rally in the last session.
Perhaps the most high-profile driver of this rally is the recent alliance made between artificial intelligence (AI) and nuclear energy.
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Indeed, Oklo has received significant venture capital backing from major players in the booming industry, with OpenAI’s Sam Altman and Palantir’s (NYSE: PLTR) Peter Thiel perhaps being the most notable investors.
The strengths and weaknesses of the OKLO stock rally
Additionally, the company received tailwinds in late September when the Department of Energy approved its plans to investigate a location at Idaho National Laboratory in Idaho Falls for a planned nuclear reactor. In October, the conceptual design for the Aurora Fuel Fabrication Facility was also approved.
Oklo designs and produces ‘compact’ fission reactors that provide 15-50 MWe of electrical power for data centers, AI, remote settlements, military bases, and industrial plants.
Still, despite the backing from some of the hottest names in big tech and the Department of Energy approval, OKLO shares may not be able to sustain their rally long-term for multiple reasons.
For starters, work at the Idaho site cannot be guaranteed to begin in 2027 as planned, as Oklo has yet to receive construction approval from the Nuclear Regulatory Commission.
Furthermore, fission reactors may become obsolete relatively soon, depending on how well the various fusion reactor projects – such as the International Thermonuclear Experimental Reactor (ITER) megaproject – go.
The nuclear energy renaissance
Whatever the future may hold, Oklo has so far benefitted from a recent renaissance in nuclear power, driven by big tech plans to utilize the abundant energy source for their AI programs.
In general, multiple firms and funds involved with atomic energy have been rallying in recent months as drives, such as Microsoft’s (NASDAQ: MSFT) plans to restart the Three Mile Island nuclear reactor, became public knowledge.
Finally, along with the need to meet the AI boom’s energy demands, fission has been gaining traction as a reliable and powerful source of relatively clean energy and a potential means of mitigating the climate catastrophe.
Apart from the big tech drives to reignite reactors, numerous countries are also seeking to bolster their energy grids. According to the data retrieved from the World Nuclear Association website, 60 plants are under construction, and another 110 are planned on all continents except Australia and Antarctica.
