Why This Sam Altman-Chaired Nuclear Tech Name Has Me Fired Up
Do I want to own this stock, or one of its competitors? This one please. Here's who the heck they are and how I'd get involved.
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Every hear of Oklo Inc.? The stock is popping on Wednesday morning, after the firm reported a non-binding master power agreement with Switch, to deploy 12 gigawatts of the company's Aurora powerhouse projects through the year 2044. The agreement establishes a framework for collaboration, with the expectation being that actual binding agreements will be made, and project milestones will be reached.
Switch, by the way, is a technology infrastructure company that provides solutions for AI, cloud and data center focused clientele requiring increased power in order to remain competitive.
Who the Heck is Oklo?
Oklo Inc. (OKLO) is a fission technology and nuclear fuel recycling company. On the one hand, the company develops fast fission power plants in order to provide clean and affordable energy at scale. On the other hand, Oklo is developing advanced fuel recycling technologies in collaboration with the U.S. Department of Energy and the U.S. National Laboratories.
The company provides clean energy on 24 hours, seven days a week basis to AI/cloud-based data centers, industrial sites and defense facilities. Oklo's reactors can convert used nuclear fuel into clean energy and supply affordable power to clients across many industries.
Oklo was founded in 2013 by two MIT grads. The Board is chaired by Sam Altman of OpenAI fame and Chris Wright was a member of the Board until President-elect Donald Trump nominated him to become the next Secretary of Energy.
Earnings & Fundamentals
Oklo reported its third-quarter financial results in mid-November. It posted a GAAP loss per share of $0.08, missing expectations by three cents on no revenue, which is not a misprint.
For the current quarter, Oklo is expected to post another loss of $0.08 per share on still no revenue. For the nine months ended September 30, the company generated operating cash flow of -$24.921 million and free cash flow of -$25.2 million when factoring in capex spending.
Turning to the balance sheet, Oklo ended the third quarter with a cash position of $231.37 million and current assets of $234.826 million. Current liabilities added up to $4.847 million. Yes, that's an absurdly healthy looking current ratio of approximately 48.4.
Total assets amount to $293.794 million, which includes no intangibles, while total liabilities less equity comes to $30.517 million. This includes no debt. The balance sheet is perfect, and Oklo will be able to burn cash for a few years before it has to worry about funding.
The company is not expected to post a profit or even predictable income for this full year or even next year. That said, while full-year projections are for a loss of $5.49 per share this year, next year's full year is seen around -$0.39.
The Chart
Do I want to own this name, or one of its competitors? Yes. I think I'll get into Oklo thank you.
I like the fact that Altman is at the top. I like the fact that the likely next Energy Secretary not only served in a role with the company but hopefully was there because he sees a future where the use of nuclear power is greatly expanded.
Readers will see an immature falling wedge pattern in the chart above. I don't think I need to chase Wednesday morning's rally. That said, there does seem to be support for the wedge close to the halfway back point (50% retracement) of the stock's September into late October rally. That means that I am thinking of taking a first nibble at or close to the $16.50 level. Perhaps if the 21-day exponential moving average (EMA) can cross below the 50-day simple moving average (SMA) (a swing trader's or mini death cross), I will get that opportunity.
Right now, if I ran a "small caps" portfolio for TheStreet Pro, I would be introducing this name to the "bullpen" to make sure that I and my readers kept an eye on it.
At the time of publictaion, Guilfoyle had no positions in any securities mentioned.
