Will Trump’s Energy Secretary Pick Drive Oklo Higher?
Oklo (NYSE: OKLO) shares surged over 18% Monday after President-elect Donald Trump named Liberty Energy CEO Chris Wright as his pick for Energy Secretary.
For Oklo investors, the selection carries special significance – Wright currently serves on Oklo’s board of directors, potentially giving the nuclear innovation company an influential ally in Washington just as it hits its stride with commercial deployments and new acquisitions.
Key Points
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- Oklo surged 18% after Chris Wright, an Oklo board member, was named Energy Secretary, boosting hopes for nuclear support.
- Oklo combines nuclear waste recycling with power generation, securing $25M in acquisitions and 2,100 MWe in customer deals.
- With $288M cash and efficient reactors, Oklo targets clean energy and waste solutions, advancing toward commercialization.
Oklo Has a Laundry List of Growth Efforts
The timing couldn’t be better for Oklo shareholders who have already seen management kick off numerous growth initiatives beyond its core reactor technology.
The company recently entered term sheet negotiations for a proposed $25 million all-stock acquisition of Atomic Alchemy, a move that may very well marry Oklo’s nuclear expertise with isotope production capabilities for medical, industrial, and scientific applications.
This opportunity comes alongside a previously undisclosed $25 million right of first refusal agreement signed in February 2024, giving an unnamed third party priority access to purchase between 100-500 MWe of power capacity from Oklo’s future powerhouses.
Unique Business Model and Growing Pipeline
What’s fascinating about Oklo’s approach to market entry is how they’ve flipped the traditional nuclear business model on its head.
Instead of the usual “design and license” strategy that most nuclear startups follow, they’re taking the SpaceX route – building, owning, and operating their own plants.
They have already lined up potential customers for 2,100 MWe of capacity, which might sound modest until you realize how quickly they’ve grown that pipeline – tripling since July.
When companies like Equinix and Diamondback Energy sign up for your technology before you’ve even built it, you know you’re onto something big.
Plenty of clean energy companies make big promises, but Oklo’s backing them up with firm commitments from serious players.
What Does The Market Opportunity Look Like For Oklo?
What separates Oklo’s Aurora “powerhouse” design from traditional nuclear technology is that, unlike conventional light water reactors, Oklo’s fast reactor technology operates at higher energy efficiencies and can effectively recycle nuclear waste.
This capability should not be glossed past by investors in a hurry given the massive untapped potential of over 90,000 metric tons of used nuclear fuel waste generated since 1950 and an additional 2,000 metric tons produced annually.
So far the market has been responding positively. Oklo ended Q3 2024 with $288.5 million in cash and marketable securities, and spent just $5.05 million on R&D and $7.23 million on G&A.
Simply translated, Oklo has three years of runway without additional funding and that has led to high market confidence that was further validated when all Earnout Triggering Events were achieved between November 5-13, 2024, leading to the issuance of approximately 14.7 million additional shares.
Why is Oklo Stock Going Up?
The sharp 20% gain in Oklo share price reflects the market’s optimism that President-elect Trump’s new appointment as Energy Secretary will streamline nuclear regulatory processes.
There are also hopes that Liberty Energy’s Chris Wright will help accelerate domestic energy production and support advanced nuclear technologies as part of its energy independence strategy.
These policies, combined with Wright’s understanding of both traditional and next-generation energy technologies, are likely to create a favorable environment for Oklo’s commercialization efforts.
How Does Oklo Stack Up?
Unlike competitors focused solely on reactor design, Oklo’s vertical integration strategy that spans from fuel recycling to power generation creates a host of revenue opportunities and simultaneously reduces external dependencies.
Management has secured key supply chain partnerships for critical components including steam turbine generators, steel procurement, and construction inputs, so it’s likely that Oklo will enjoy cost and timeline advantages over competitors.
So when will all the good news turn into good financials? Oklo has begun pre-application readiness assessment for its next Combined Operating Licensing Agreement, expected to begin in first half 2025.
The deployment pipeline includes its flagship Idaho site, where it recently finalized a Memorandum of Agreement with the DOE for site investigations, plus two additional Aurora powerhouses in southern Ohio and potential deployment at Eielson Air Force Base.
From an investor perspective, that translates to an opportunity to snap up a business with a unique combination of clean energy innovation, nuclear waste recycling, and AI infrastructure play.
Is Oklo Stock a Buy?
Oklo is trading almost precisely where analysts had forecast and that suggests much of the good news has been baked in at this stage.
It can’t be overstated though that the ability of the firm to recycle nuclear fuel could provide significant margin uplift while addressing critical waste disposal issues.
With a clear path to commercialization, strong balance sheet, and potentially favorable regulatory environment under a Trump administration, Oklo offers a host of value creation catalysts beyond traditional nuclear power generation.
The billion dollar question now is whether Wright’s potential role at the Department of Energy will help accelerate Oklo’s path to commercial deployment.
Of course, the stock’s recent surge is due to high optimism around this possibility, management’s highly comprehensive approach to infrastructure development, acquisitions, and commercial partnerships hint at numerous paths to value creation beyond regulatory tailwinds.
