Why Oklo Stock Is Falling Today

After bumping higher last Friday, Oklo (NYSE: OKLO) stock hasn't provided investors much to celebrate this week. Shares of the advanced nuclear reactor maker closed on both Monday and Tuesday at lower levels than they had on the preceding days. And today isn't shaping up to buck the trend as shares continue to trend lower.

As of 11:35 a.m. ET, shares of Oklo are down 4.8%.

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Geothermal news is cooling off investors' enthusiasm for Oklo stock

Oklo hasn't reported any news that investors can attribute to the stock's poor performance over the past couple of days. Instead, the market's lack of interest likely stems from two factors.

First, shares of Oklo jumped last week on news of its deal with Meta Platforms. On Friday, Oklo stock closed at $105.31 -- a price it hasn't touched since early December -- and investors are likely taking profits this week after the stock's rise.

The second catalyst stems from news that geothermal specialist Ormat has signed a 20-year power purchase agreement (PPA) with data center operator Switch. In the press release announcing the deal, Doron Blachar, CEO of Ormat, suggested there's room for the relationship to grow further:

"We are encouraged at the opportunity to continue growing this relationship with potential PPA expansion as well as additional new agreements to supply geothermal power to Switch as they continue scaling their business into the strong demand backdrop for the data center industry and Switch's specific capabilities."

Investors may speculate that Oklo's opportunity with data center operators seeking to secure adequate power supplies has now diminished, now that geothermal has emerged as an apparent alternative to the nuclear reactors that have gained attention recently.

What's an Oklo investor to do now?

The multiday decline in Oklo stock may be disconcerting, but nothing has changed regarding the bull case. Geothermal power is limited by geography, making it a less viable solution for data centers located in many parts of the United States. If you were bullish on Oklo stock yesterday, you should remain so today.

Scott Levine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Meta Platforms. The Motley Fool has a disclosure policy.