Opportunities and Challenges in the Energy Race for AI: Can Nuclear Stocks like Oklo Break Through?

Energy Demand from AI Creates Strong Pressure on Power Supply

It is undeniable that the explosion of artificial intelligence is driving a surge in energy demand. Forecasts indicate that computational pressure will remain high throughout 2026 and the coming years, directly leading to continuous increases in electricity consumption. However, the bigger question is: will electricity providers automatically benefit?

Market reality shows that investors often anticipate these major trends. Most of the optimism about the AI energy wave has already been reflected in current prices. For young companies like Oklo—a business that has not yet generated actual revenue—determining appropriate valuation levels becomes extremely complex.

Oklo Breakthrough and Fall: Lessons from a 50% Drop

Oklo, a Santa Clara-based company specializing in small nuclear reaction technology, has become a focal point in the clean energy industry. Oklo’s strength lies in developing modern, compact, safer reactors that can operate continuously for up to 20 years without refueling.

The trajectory of OKLO stock in 2025 is a classic story of overly high expectations. The stock price increased 6.5 times from the initial level, but in the last quarter of the year, it experienced a sharp decline—losing more than half its value in just a few months. Investors at the peak had to face significant disappointment.

This price drop was not solely due to overvaluation. According to Joseph Shangraw from Wood Mackenzie, the main reason lies in changing market attention. As policy support waned, the focus of the energy sector shifted: coal-fired power plants and traditional data centers became more favored options.

Unfair Competition: Coal vs Nuclear

This is an interesting market twist. Despite environmental concerns, energy stocks from coal have performed better than those related to nuclear reactions. This suggests that the projected returns for nuclear companies have not seen significant improvement.

If the industry continues to focus on expanding data center capacity through traditional energy methods, nuclear companies like Oklo risk falling behind in the race. To mitigate risks, investors should monitor overall industry developments rather than focusing solely on individual companies.

Financial Situation: Realistic Pressure vs Managed Optimism

Oklo’s Q3 results announced on November 11 were not optimistic. The reported EPS was -$0.20, below the expected -$0.13. Looking ahead, the outlook is no better: Q4 EPS is forecasted at -$0.17, and for the full year 2026, -$0.63.

Nevertheless, Oklo’s management remains resolute. They point out that cash burn rate is within expectations, and the $1.2 billion reserve is sufficient to support ongoing R&D activities. Both the CEO and CFO emphasize: instead of worrying about short-term financial metrics, focus on legal milestones, project deployment, and research progress.

For a company at Oklo’s stage, losses this quarter may be acceptable. However, investors should not forget that Oklo still carries high speculative risk in the fields of AI and advanced energy.

Analytical Perspective: Hopeful Light or Cautionary Warning?

Currently, 19 Wall Street analysts follow OKLO. Half of them rate it as “Strong Buy,” but 7 recommend “Hold,” reflecting division within the analyst community.

The average target price is set at $108.56, representing a potential 13.6% upside from the current level. The most optimistic target reaches $175, suggesting the stock could double. In early December, a wave of positive rating upgrades from analysts provided short-term momentum for the stock price.

However, the divergence in opinions indicates that investors should exercise caution before participating, especially those considering Oklo’s long-term value.