Why Did Oklo Stock Fall 16.2% This Week?
Key Points
Bullish sentiment that has been fuelling the meteoric rise of Oklo's stock waned this week.
With no revenue to show for it, the company's more than $20 billion valuation is making investors nervous.
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Shares of Oklo (NYSE: OKLO) fell this week, down 16.2% as of 3:16 p.m. ET on Friday. The move comes as the S&P 500 gained 2.1% and the Nasdaq-100 gained 2.4%.
After months of positive sentiment driven by projected power demand from artificial intelligence (AI) data centers, Oklo's stock has exploded, up nearly 550% this year alone. This week, several news stories sowed doubt in the minds of investors as to just how much power AI will need in the coming years.
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A research paper out of China was widely circulated that claims AI models can be made to run much more efficiently without sacrificing utility. This was followed closely by comments from the CEO of a major producer of gas and wind turbines signaling that growth could be slowing.
Image source: Getty Images.
Oklo has a long road ahead
Oklo has no revenue. It does not yet have a viable product. That makes it a highly speculative investment, and for its current valuation to make any sense, AI demand must continue to stay white-hot. If it doesn't, Oklo stock could plummet.
I would wait for its valuation to come back to earth before investing; it's a long road to bringing in meaningful revenue, let alone turning a profit.
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Johnny Rice 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.
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