Pre-revenue energy company Oklo (OKLO) is focused on advanced nuclear fission technology and, understandably, has enjoyed stellar gains in the market this year, with its stock up almost 350%. Oklo is riding the perfect storm, supported by massive electricity demand, and is yet another industry being swept by AI boom mania.
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AI adoption is triggering massive spending decisions on R&D and is receiving strong political support to boot. Although I believe Oklo has the potential to emerge as a significant new energy company in the wake of AI, the current valuation appears to have already accounted for much of this future growth, leaving investors with a fairly valued business. For this reason, I am Neutral on the prospects for Oklo stock.
AI Adoption Creates Perfect Storm for Electricity Providers
One of the primary reasons to be optimistic about Oklo’s future is the massive energy demand triggered by the widespread adoption of AI across nearly all business sectors. According to the International Energy Agency, data centers consumed 460 TWh of electricity in 2022, which is expected to more than double to over 1,000 TWh by 2026. This is equivalent to the entire electricity consumption of Japan, underscoring the massive energy requirements of AI technology.
Boston Consulting Group agrees with these expectations and estimates that data centers will account for ~60% of total load growth between 2023 and 2030. Industry experts and tech visionaries, including OpenAI CEO Sam Altman, Elon Musk, and Arm Holdings (ARM) CEO Rene Haas, have all highlighted that the U.S. is likely to face an energy crisis due to rapid AI adoption.
OKLO has surged to nosebleed levels in 2025, soaring more than 250% above the S&P 500 (SPX) on the back of the AI craze.
Oklo’s leadership is already positioning the company to capture this opportunity. On the Q2 earnings call, CEO Jacob DeWitte noted that the looming energy crunch is creating a favorable backdrop for nuclear solutions. Though still pre-revenue and awaiting regulatory approval to begin construction of its first plant, Oklo is investing heavily in advancing its Aurora powerhouses—compact reactors built to provide distributed, always-on power for mission-critical AI workloads.
As part of its commercialization push, the company has already lined up partnerships with major data center operators, including Equinix (EQIX), Vertiv Holdings (VRT), and Prometheus Hyperscale.
Policy Support De-Risks Oklo’s Commercialization Plans
In addition to the favorable energy demand trends discussed above, Oklo seems well-positioned to benefit from regulatory tailwinds in the coming years. Last May, the U.S. government introduced several executive orders aimed at designating nuclear power as a national security priority, setting the stage for Oklo to obtain the required approval for building and maintaining its power plants.
Some of these transformative decisions include mandating that the Nuclear Regulatory Commission review new reactor applicants within 18 months of the application date and directing the Department of Energy to fully utilize government-owned uranium resources to make them available to the private sector. The ADVANCE Act, enacted in July 2024, and the One Big Beautiful Act have also introduced several favorable policies for the nuclear industry, such as tax credits, financing support, and accelerated environmental reviews.
In addition to this, earlier this week, the nuclear sector received another piece of good news when the U.S. and the UK announced the Atlantic Partnership for Advanced Nuclear Energy, which aims to accelerate the deployment of nuclear reactors in both nations as part of their efforts to achieve energy independence. These favorable regulatory developments will play a crucial role in helping Oklo and other nuclear energy infrastructure developers to enjoy accelerated commercialization plans.
Oklo is Prepared to Leverage Macro Tailwinds
Oklo has carved out a distinctive position to capitalize on favorable demand dynamics and potential regulatory support by developing a differentiated, vertically integrated business model. Unlike most energy infrastructure firms that design reactors and sell them to utilities, Oklo intends to control the whole stack—building power plants, developing reactors, and operating them as a standalone business. Its strategy centers on selling power in the form of electricity and heat through long-term power purchase agreements, creating a recurring revenue stream.
So far, the actuality of OKLO’s business plan has not yielded meaningful valuation metrics, such as P/E or P/S ratios. However, investors can track OKLO’s progress via TipRanks’ statistics pages.
What sets Oklo further apart is its technology foundation. The company’s Aurora powerhouses leverage liquid metal fast reactor technology based on the proven EBR-II design. This established framework not only strengthens the company’s technical credibility but may also accelerate the regulatory approval process—potentially allowing Oklo to be one of the first nuclear players to supply the grid in the AI era.
Is Oklo a Good Stock to Buy?
On Wall Street, OKLO stock carries a Moderate Buy consensus rating based on six Buy, four Hold, and one Sell ratings over the past three months. OKLO’s average stock price target of $72.50 implies approximately 24% downside potential over the next twelve months.
Based on valuation alone, I also believe that investors should exercise caution today, as Oklo, after a more than 10-fold increase in its market value over the past 12 months, is already valued at $14 billion.
It is essential to note that Oklo remains a pre-revenue business, and a power plant is not anticipated to go live until 2028, even if the company secures the necessary regulatory approvals without any unforeseen setbacks. Investors should ideally leave room for any regulatory hurdles that may arise as the U.S. government works its way to integrate nuclear energy into the power grid to support AI technology.
Oklo’s AI-Powered Momentum Meets a Valuation Reality Check
Oklo’s stock has staged an impressive rally, buoyed by favorable regulatory developments and supportive macro tailwinds. Surging electricity demand from AI is widely expected to push the U.S. toward an energy crunch in the coming years, which in turn could strengthen the case for alternative, low-cost energy solutions, such as nuclear.
With its vertically integrated business model and established technological foundation, Oklo appears well-positioned to capture this emerging demand. That said, with the company already carrying a market capitalization of $14 billion, much of this optimism seems priced in—leaving me neutral on the stock’s forward prospects.