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Sam Altman’s startup grows 176%, Cathie Wood invests in nuclear stocks
OKLO, supported by OpenAI leader Sam Altman, has experienced a 175% increase in October, as leading hyperscalers are investing more in nuclear power for data centers and AI advancements.
Nuclear energy stocks like Oklo have been performing well since late September when Microsoft revealed a 20-year agreement with S&P 500 company Constellation Energy to supply nuclear power for their data centers.
Currently, Amazon.com (AMZN) and Alphabet (GOOGL) have signed nuclear agreements, causing an increase in the stocks of nuclear-related companies. Nevertheless, a large number of the stocks are overvalued.
In the past few days, both Amazon and Google have revealed plans to invest in advancing the developing small modular reactors, also known as SMRs, technology. Small modular reactors are not currently in existence, however, there are several companies actively engaged in the development of this technology. Amazon made an initial step towards nuclear energy in March by purchasing a Talen Energy (TLNE) nuclear-fueled data center campus in Pennsylvania for $650 million.
Major hyperscalers such as Amazon, Microsoft, Alphabet, and Meta are turning to nuclear power to address rising energy usage in data centers.
Artificial Intelligence and Nuclear Power
In 2024, nuclear power and utility stocks have been benefiting from the surge in artificial intelligence energy. Sam’s project is the best example.
Artificial intelligence, along with the necessary data centers for training the systems, is predicted to increase energy consumption in the coming decade. McKinsey & Co. predicts that the energy demand of data centers in the U.S. will increase from approximately 4% to 11%-12% by 2030.
Numerous technology firms are making investments in or forming partnerships with nuclear power companies to secure energy sources for their data centers.
In recent months, analysts at Morgan Stanley have declared that there is a “nuclear renaissance” currently taking place.
They stated that nuclear power, despite still being a controversial topic, is experiencing a revival. The company anticipates $1.5 trillion will be invested in new capacity by 2050.
In the interim, analyst David Arcaro from Morgan Stanley stated that the Constellation-Microsoft agreement demonstrates the importance of nuclear power for hyperscalers, with increased prices expected for upcoming deals.
Stocks experience a Surge in Value
Vistra (VST), a top performer in the S&P 500 known for its nuclear power utilities, experienced a 2% decline in premarket trading on Tuesday following a 0.6% drop to 130.37 on Monday.
Constellation Energy, another company in the S&P 500, dropped by 1% on Tuesday following a 1.3% increase to 273.62 on Monday.
Vistra and Constellation Energy have experienced a 40% and 30% increase, respectively, following The Microsoft-Constellation Energy agreement on Sept. 20.
On Thursday, JPMorgan began covering Constellation Energy and Vistra Energy, two components of the S&P 500. The company gave VST and CEG a rating of overweight.
JPMorgan’s price target for Constellation Energy is 342, while their price target for Vistra is 178. This signifies an additional 22% potential increase for CEG and a 31% potential increase for VST relative to their current trading prices.
In contrast, Oklo dropped about 1% in the early hours of Tuesday following a previous 22.4% increase to 22.31 on Monday. Oklo’s stock surged by almost 100% in the past week. On Friday, the stock increased by 15.9% and closed at 18.23. Oklo’s stock saw a 40.5% increase on Wednesday following a successful early entry on Tuesday.
The SMR developer supported by Altman has seen a significant increase of 175.8% in October and approximately 237% since the Microsoft-Constellation Energy partnership.
Cathie Wood Also Invested
Cathie Wood and her ARK Invest offloaded 378,589 Oklo shares on Monday for a sum of $8.45 million, reflecting the stock’s closing value. Before Monday, ARK Invest accumulated over 1 million shares of Oklo starting in mid-July. Peter Thiel is additionally a significant investor in Oklo.
Another SMR-oriented company Nano Nuclear Energy (NNE) experienced a drop of approximately 6% on Tuesday morning. NNE surged by 34.2% on Monday, continuing the 8.8% increase from Friday. NEE stocks surged by 37.8% on the Wednesday before last.
NuScale Power (SMR) also declined approximately 2% on Tuesday. On Monday, the stock surged 4.2% to 18.98. SMR experienced a 1% increase on Friday. SMR stocks also experienced a 40% increase last Wednesday.
On Tuesday, Cameco, a uranium refiner, saw a slight decrease of 0.2%. The stock broke above a buy point of 52.32 last week. CCJ was designated as the Stock Of The Day by IBD last Wednesday.
Cameco, a company headquartered in Canada, is among the biggest suppliers of uranium worldwide, with utilities all over the world depending on them for nuclear fuel services.
At the same time, Uranium Energy (UEC) slightly increased on Tuesday, as the company focuses on uranium exploration and development in the U.S. Southwest and Paraguay.
On Friday, UEC increased by 1.3% to reach 8.46, following a 4.7% rise on Thursday.
The company announced on Thursday that it had been approved by the Wyoming Department of Environmental Quality to expand uranium production capacity at a key processing plant.
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