Shares of Oklo Inc. OKLO have surged an impressive 70.1% in the past year, outperforming the Zacks Alternative-Energy industry’s return of 30.5% as well as the broader Zacks Oils-Energy sector’s decline of 2.5%. It has also outpaced the S&P 500’s surge of 9.3% in the same period.

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A similar stellar performance has been delivered by other industry players, such as GEV Vernova GEV and Bloom Energy BE, whose shares have surged 116.7% and 65.1%, respectively, over the past year.

With clean energy being the preferred source for electricity generation over the past decade, renewable energy stocks like Oklo, GE Vernova and Bloom Energy have been riding high lately as these strive to reinforce their commitments to delivering reliable, commercial-scale clean energy solutions.  

With Oklo riding high, individuals may rush to add the stock to their portfolio. However, before making any hasty decision, it would be prudent to take a look at the reasons behind the surge, the stock’s growth prospects as well as risks (if any) to investing in the same. The idea is to help investors make a more insightful decision.

What Led to OKLO Stock’s Price Surge?

The increasing growth of data centers worldwide, coupled with rising electricity consumption, particularly in emerging nations and developing economies, driven by strengthening economic activities and prosperity in these countries, has been boosting global electricity demand. This, in turn, has been benefiting clean energy solutions providers like OKLO in the form of a solid share price hike, as mentioned above. Notably, the company is developing next-generation fission powerhouses to produce abundant, affordable and clean energy on a global scale. 

Among the company’s recent achievements in expanding its footprint in the clean energy industry, worth mentioning is its signing of an Interface Agreement (“IAG”) with Idaho National Laboratory in March 2025. This agreement is designed to ensure strict adherence to environmental regulations throughout the site investigation process for the deployment of OKLO’s first commercial powerhouse in Idaho. 

Oklo also completed the acquisition of Atomic Alchemy, a leading innovator in radioisotope production, in March. This strategic acquisition is expected to enhance Oklo’s capabilities to establish a reliable domestic supply chain for high-value radioisotopes critical to healthcare, research and defense sectors. The buyout will also boost Oklo’s fuel recycling and nuclear energy businesses, which might have boosted investors’ confidence in this stock recently.

Will OKLO Stock Continue to Grow?

The rapid expansion of data centers worldwide, coupled with rising electricity consumption (particularly in emerging economies driven by economic growth), has been fueling global electricity demand. To this end, it is worth noting that the United States remains the largest producer of nuclear power, accounting for nearly 30% of global nuclear electricity generation, according to the World Nuclear Association.

This has set the stage for Oklo to generate notable profits over the long run, with its fast reactors now able to deliver between 15-75 megawatts (MW) of power from a single powerhouse (as of Dec. 31, 2024), to flexibly address the diverse power needs of its broad customer base. 
However, the company is yet to generate revenues, with its first Aurora powerhouse expected to be deployed in 2027. This suggests limited top-line performance in the near term. Meanwhile, Oklo continues to incur significant operating expenses to advance its powerhouses, placing downward pressure on its bottom line. 

Therefore, while OKLO’s long-term potential in the nuclear power industry remains strong, its huge operating expenses and the prolonged timeline before revenue generation may weigh on its near-term performance. 

In line with this, the downward revision in its first-quarter and full-year 2025 earnings estimates over the past 60 days reflects declining confidence among analysts in Oklo’s earnings growth capabilities. 

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OKLO’s Poor ROE Poses Risk

A quick glance at the company’s return on equity (ROE) over the past year compared to that of its industry reveals a dismal scenario. OKLO’s ROE is lower than that of its industry. A negative return on equity (ROE) indicates that a company is incurring a loss, as evident from its recent quarterly results.

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On the contrary, Bloom Energy boasts a ROE higher than the industry’s value, while GEV’s ROE is lower than that of the industry, although it’s a positive figure.

Final Thoughts

To conclude, investors interested in OKLO stock should wait for a better entry point, considering the downward revision in its near-term earnings estimate and a negative ROE. OKLO currently has a VGM Score of D, which is also not a very favorable indicator of strong performance. 

The stock’s Zacks Rank #4 (Sell) further supports our thesis.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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