Is Oklo Stock Your Ticket to Becoming a Millionaire?

Imagine a tiny power plant, about the size of a house, that can run nonstop for years and make lots of electricity without any smoke or pollution. If you can picture that, then you can see what Oklo (NYSE: OKLO) is trying to build: essentially, a mini nuclear reactor that can take nuclear waste or special fuel and turn it into clean power.

It doesn't have the regulatory approval to build these reactors commercially, but if it gets it, sales could increase significantly. Would it be enough to turn Oklo investors into new millionaires? Let's take a look at the opportunity.

Image source: Oklo.

Why companies are interested in Oklo

Again, the idea behind Oklo is pretty radical. Shrink a nuclear power plant into a reactor so small it can be mass-produced in a factory. Sell the power those reactors generate, and you could have a profitable business. With these reactors, Oklo is trying to do two things at once: create a new source of clean power, thereby reducing dependence on fossil fuels, and give companies a way to get the electricity they need without waiting years to connect to a local utility.

That last part is the bigger long-term opportunity right now. For one reason: artificial intelligence (AI). With nuclear power, AI companies and data centers can get round-the-clock electricity without competing with everyone else for power from a local grid. Ideally, they also wouldn't have to wait as long, since Oklo's small reactors theoretically take less time to build than a conventional power plant.

Oklo is currently working through the regulatory process to make these reactors a reality. In the meantime, it has secured support from several big tech companies, including Meta Platforms, which has further agreed to help fund a planned nuclear power campus in Ohio. Could Oklo make you a millionaire?

For Oklo to turn today's investors into millionaires, the stock would have to gain many times its value -- possibly 100 or more. Growing by 100-fold would make it one of the most valuable energy companies in the world by today's standards. It would be an incredible run for Oklo to become the next 100-bagger, yet also probably not one investors will see.

Constellation Energy, for example, operates the largest nuclear fleet in the U.S. It currently has a strong $106 billion market value, making it one of the country's largest utility companies. If Oklo increased 100-fold, the company would be worth $640 billion -- roughly six times as large as Constellation.

That doesn't mean Oklo can't grow into a company worth half a trillion dollars. But given where the company is today -- it hasn't deployed a single reactor for commercial revenue -- it's very difficult to imagine a future in which Oklo is generating enough revenue to support a market value of that caliber.

So no: I wouldn't invest in Oklo expecting to earn a million off this nuclear stock alone. Given the remaining risks, I would only invest if you can stomach the losses and volatility. Oklo might have big ideas, but for now, a small speculative position within a diversified portfolio seems like the safest way to invest in this nuclear hopeful.

Steven Porrello has positions in Oklo. The Motley Fool has positions in and recommends Constellation Energy and Meta Platforms. The Motley Fool has a disclosure policy.