OKLO Earnings, Nuclear Power's A.I. "Narrative Trade" & Other Stocks to Watch

Core Insights - The stock of Oaklo experienced significant volatility, dropping nearly 7% before recovering to trade between 116 and 104, indicating market indecision following a reported net share loss of 20 cents, which was worse than the expected loss of 13 cents [2][4] - Despite the disappointing earnings report, Oaklo's stock is up over 400% year-to-date, suggesting a disconnect between its performance and valuation, driven largely by narrative trading related to AI and small modular reactors (SMRs) [4][5] Company Performance - Oaklo reported a deeper than expected loss of 20 cents per share, with minimal revenue, leading to discussions about the hype surrounding the stock [2][4] - The company has received approval for its nuclear safety design from the Department of Energy (DOE) and is in the process of building a fuel fabrication facility, but questions remain about the significance of these milestones [9][10] Industry Context - The small modular reactor sector is characterized by high volatility, with many stocks in this space experiencing fluctuations of around 10% [3][6] - There is a belief that small modular reactors could play a crucial role in meeting energy demands, particularly in the context of AI and data center growth, although no company in this sector has yet produced power at a commercial scale [6][7] - Regulatory support exists, but challenges remain in terms of component bottlenecks and the lengthy timelines required to bring power plants online [8][9] Investment Outlook - Long-term investment in the nuclear energy sector is viewed positively, with suggestions to buy on dips, despite the current lack of revenue generation from many companies [8][9] - BWXT is highlighted as a more stable investment within the sector, having secured government contracts and already producing energy through modular systems [11][12] - The potential for consolidation among successful startups in the SMR space is noted, with larger companies likely to acquire promising smaller firms [16][17]