Oklo, the nuclear power startup backed by OpenAI head Sam Altman, reported second-quarter financial results late Tuesday. Meanwhile, Cathie Wood continues to buy up shares and political support for nuclear energy from both Democrats and Republicans appears to be growing.
Oklo reported late Tuesday that so far this year it has seen a net operating loss of $25.1 million. For the full year, Oklo forecasts an operating loss of $40-$50 million. The company also reiterated that its first Aurora powerhouse is expected to be operational by 2027 and that its customer base is worth 1,350 megawatts in signed letters of intent, up from around 700 megawatts in July 2023.
"As one of the initial investors in the company, I've seen first-hand how Oklo has proven itself to be an innovative energy leader, developing a cost-competitive go-to-market strategy, and solidifying important relationships with regulators customers and suppliers. There are huge growth opportunities ahead," Altman said in the investor letter Tuesday.
Altman has served as Oklo chairman since 2015. Oklo stock declined 3.5% during premarket action on Wednesday after gaining 5.2% to 7.42 on Tuesday.
On May 10, Oklo began trading under its current ticker on the New York Stock Exchange after completing its business combination with AltC Acquisition Corp. Shares have been anything but highflying, trading below their IPO price of 10.
However, Cathie Wood has been building a position in Oklo worth more than $2 million since mid-July. Wood's Ark Autonomous Tech bought Oklo shares in consecutive trading sessions prior to earnings. On Monday, the fund scooped up 53,163 Oklo shares, for an estimated $374,799, according to daily trading disclosures. Wood followed that up Tuesday adding 7,506 for around $55,690.
AI Is Fueling A 'Nuclear Renaissance.' Bill Gates And Jeff Bezos Are In The Mix.
Oklo Looks To Build Business
Santa Clara, Calif.-based Oklo agreed in May to supply data centers being developed by Wyoming Hyperscale with 100 megawatts of clean power for the next 20 years.
Oklo — which has yet to deliver an operating, commercial reactor — is also working on advanced fuel-recycling technologies. It works in collaboration with the U.S. Department of Energy and U.S. National Laboratories.
Oklo, confident that federal regulators will approve its Aurora powerhouse project, maintains it is on track to first deploy energy in 2027.
The company says more deals are in the pipeline and it has "tremendous uptake of customer interest."
Through the end of March, the developer of small, fast-fission nuclear plants neither engaged in any operations nor generated any revenues, according to regulatory filings. The company's primary activities related to its Initial Public Offering (IPO) process.
In 2023, the operation had net income of $11.868 million, operational costs of $4.27 million and a provision for income taxes of $6.09 million. Two years ago, the company had net income of $3.92 million with operational costs of $1.81 million and a provision for income taxes of $1.47 million.
Nuclear Power Rides The AI Wave
Artificial intelligence and the data centers needed to train the AI systems are expected to boost energy demand throughout this decade. In the U.S., McKinsey & Co. projects that data center energy demand will grow around 10% every year through 2030.
Additionally, in 2022, the 2,700 U.S. data centers consumed around 4% of the country's total electricity generated, according to the International Energy Agency. The agency projects that by 2026, such centers will make up 6% of electricity use.
Amazon.com, Microsoft and Google-parent Alphabet have all made bets on nuclear power to ensure energy supplies for their data centers. Bill Gates has become a leading investor in the technology. Jeff Bezos is backing a nuclear startup in Canada.
The IBD-tracked Energy-Alternative/Other industry group has pulled back since May, and is currently up around 5% in 2024, after outperforming the broader market for much of the year. The advance was led by S&P 500 nuclear power providers Constellation Energy and Vistra.
While Oklo is working on small, fast-fission nuclear plants, Constellation Energy owns 25% of U.S. nuclear power reactors. Further, it provides energy to more than 20% of the major commercial and industrial customers in the country.
Last week, Constellation Energy increased full-year profit guidance even as second-quarter earnings and revenue came in slightly under analyst expectations. The company expects 2024 EPS between $7.60-$8.40 per share, up from its previous view of $7.23-$8.03 per share. Analyst consensus has 2024 EPS coming in at $7.76, which would represent a 40% gain compared to 2023.
Meanwhile, Vistra reported last week that Q2 profit grow 20%, in line with expectations, with sales also increasing 20%, underperforming analyst forecasts. Vistra is a retail electricity and power generation company.
Fellow utilities play NRG Energy reported second-quarter earnings skyrocketed 218% to $3.37 per share, well above projections of $1.15, but revenue came below forecasts.
Nuclear Power Is Gaining Political Backing
During Monday evening's "live conversation" between Tesla Chief Executive Elon Musk and former President Donald Trump, both men expressed support for nuclear energy.
Meanwhile, Vice President Kamala Harris' 2024 running mate, Minnesota governor Tim Walz, has also been friendly to nuclear power efforts.
Walz has supported repealing a moratorium on new nuclear power plant development in Minnesota. The governor has also said he sees nuclear power as an answer to climate policy, job policy and national security policy.
Mark Nelson, of consultancy Radiant Energy Group, told the Financial Times recently that "anybody with a lot of money on the line for nuclear projects right now is likely to be waiting to see what the choice of the American people is, before wading in."
Oklo stock has a 14 Composite Rating out of a best-possible 99. Shares also have a 10 Relative Strength Rating and a 2 EPS Rating.
Please follow Kit Norton on X @KitNorton for more coverage.
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