What's Wrong With Oklo's Stock?

Investing in nuclear energy has been a big theme amid the tech build-out going on due to artificial intelligence (AI). Companies involved in nuclear energy have been fairly hot buys given the pressing needs for greater energy, and for it to be sourced in an environmentally friendly way.

Oklo (NYSE: OKLO) has benefited from that expectation in a huge way. Its small modular reactors are seen as being possible solutions to growing energy needs. They are small enough to be placed near data centers, and the stock has effectively offered investors a way to profit from the AI boom without directly investing in tech stocks.

But why then is this promising growth stock struggling of late, and down 36% thus far in 2026?

The problem with Oklo's stock may simply be its high valuation

As with anything tech and AI-related, Oklo's stock became egregiously valued during the past year. This is a company that still doesn't generate any revenue. Its first Aurora powerhouse might come online within the next year or two, and it'll likely still take a long time after that before the company generates meaningful revenue, much less profitability; over the trailing 12 months, Oklo has incurred operating losses totaling $173 million.

Even today, with a valuation of around $8 billion, investors are valuing the business highly, despite it still having a lot to prove. But that's still much more modest when compared to how high its valuation has been over the past year.

OKLO Market Cap data by YCharts

Is Oklo's stock cheap enough to buy now?

Oklo's valuation has taken a considerable hit over the past several months as the stock is down around 76% from its 52-week high. It may seem cheap based on that, but that doesn't mean it's a value buy or that it's so low that it can't fall even lower.

At this early stage, it remains a speculative buy and will primarily appeal to risk-averse investors looking to profit from the growth of AI data centers. Oklo, however, isn't a slam-dunk buy even at these levels, because even once it begins generating revenue, the more pressing issue will be how long it may take for it to turn a profit and how well it'll be able to scale. With persistent losses and ongoing cash needs, dilution is a big risk and could send the stock far lower.

Oklo's stock may be trading at a significantly reduced price and have considerable upside in the long haul, but it still isn't appropriate for most investors given the risk.

David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.