A noted exchange traded-fund (ETF) manager has found her next big bet. Cathie Wood is well-known for identifying strong tech stocks before they surge. Now, Wood is betting on nuclear energy through an investment in Oklo (NYSE:OKLO), a company backed by OpenAI founder Sam Altman.
OKLO stock has been fairly volatile over the past two quarters, although it has picked up momentum recently. However, Wood betting big on the fairly small company signals that nuclear energy stocks may be about to come sharply into focus for Wall Street. Demand for the controversial technology could be about to boost Oklo and its peers.
What’s Happening With OKLO Stock?
Trading has been volatile this morning for Oklo, even as news of Wood’s investment continues to trend. Shares initially rose as markets opened but have since lost momentum. However, OKLO stock remains in the green for the week with gains of 14%. And it could easily start trending upward again as momentum shifts.
How big is Wood’s position in Oklo? According to reports, her Ark Autonomous Technology & Robotics ETF added 214,461 shares of OKLO stock to its holdings on July 16. Based on the stock’s $8.81 per-share price at the close of markets that day, this purchase totaled roughly $1.89 million. The ARKQ fund also includes positions in companies such as Tesla (NASDAQ:TSLA) and Teradyne (NASDAQ:TER).
Since going public in May 2024, OKLO stock has struggled to maintain consistent momentum. But that fits perfectly within Wood’s classic investing strategy of buying beaten down tech stocks and waiting for them to start reaching their full potential. For all its recent volatility, she clearly sees high growth ahead for OKLO. That’s likely due to the sector it operates in.
Why It Matters
Wood’s purchase comes at what will likely be a pivotal time for nuclear energy. The artificial intelligence (AI) boom has sparked energy demand, specifically with the vast number of data centers that are necessary to train language models. Data from McKinsey & Company shows that power demand for data centers is expected to grow at a compound annual growth rate (CAGR) of at least 9% from 2022 to 2030. This trend has created a lucrative niche for companies in the nuclear power space, as the energy source has the potential to supply the vast power that data centers need.
One thing that Oklo can offer investors is a fairly unique approach to nuclear energy generation. As InvestorPlace contributor Jeremy Flint notes, the firm’s experimental “fast reactors” could give rise to “safer and more efficient nuclear plants.” Flint provides further context on the bullish case for OKLO stock:
“As expected from any R&D-centric meme stock, Oklo is deeply in the red as a pre-revenue venture. Still, with limited debt and the backing of Silicon Valley’s top names […] Oklo’s near-term future is all but secured as it races toward a new era of sustainable energy.”
Now Wood’s bet on OKLO stock will help put the company on Wall Street’s radar as it continues making progress. If its fast reactor method is successful, Oklo has the potential to become a key player in the nuclear and sustainable energy production spaces.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
