This Sam Altman Startup Has Exploded 100% This Month as Nuclear Stocks Heat Up

The nuclear power startup backed by OpenAI head Sam Altman has seen its stock price surge over 100% in October, reflecting a booming interest in nuclear energy as major hyperscalers ramp up their investments in this sector to support their vast data centers and artificial intelligence (AI) initiatives. The surge in nuclear energy stocks, including Oklo—Altman’s startup—has been significantly influenced by major deals between technology giants and nuclear power providers.

Nuclear Power and Tech Giants: A New Renaissance

The renaissance of nuclear energy stocks has been particularly pronounced since late September, following an announcement from Microsoft (MSFT) regarding a two-decade contract with Constellation Energy (CEG) to supply nuclear power for its data centers. This influential move has been quickly echoed by other tech leaders; both Amazon (AMZN) and Alphabet (GOOGL) have recently entered into agreements to invest in the development of small modular reactor (SMR) technology, a field poised for innovation and expansion.

Interestingly, while SMRs do not currently exist in mainstream use, numerous companies are diligently working to bring this promising technology to development. In March, Amazon, recognizing the growing demand for sustainable energy, made a significant investment of $650 million in Talen Energy, acquiring a nuclear-powered data center campus in Pennsylvania. As data consumption from applications in AI surges, hyperscalers including Amazon, Microsoft, Alphabet, and Meta (META) are increasingly weighing the benefits of nuclear energy to alleviate rising energy demands from their data centers.

AI’s Energy Demand Driving Nuclear Stocks Up

In 2024, the synergy between nuclear power and the artificial intelligence sector is becoming ever clearer. As energy consumption continues to evolve, there are predictions that data center energy demand in the U.S. will escalate from approximately 4% of total energy demand now to 11%-12% by 2030, according to McKinsey & Co. This projection serves as a driving force for technology companies, who are now exploring investments and partnerships with nuclear providers to secure a stable energy supply for their rapidly growing data infrastructures.

Supporting this trend, Morgan Stanley analysts have noted that a “nuclear renaissance” is underway, despite the historical controversies surrounding nuclear power. They project a staggering $1.5 trillion investment in new nuclear capacity by 2050. Recent deals, including that between Constellation and Microsoft, are seen as pivotal in demonstrating the viability and potential profitability of nuclear power for hyperscale data operators.

Market Reactions and Stock Performances

The enthusiasm surrounding nuclear stocks is reflected in the recent market activity. Key players in the space, such as Vistra (VST) and Constellation Energy, have experienced significant stock performance fluctuations. For example, Vistra saw a reduction of 6.2% during Thursday’s market trading but had jumped 5.7% on Wednesday. Meanwhile, Constellation Energy faced similar volatility, dropping 3% on Thursday but gaining over 5% just a day prior. Since the Microsoft-Constellation deal announcement on September 20, these stocks have risen 46% and 34%, respectively.

In a further sign of confidence, JPMorgan initiated coverage on both Constellation Energy and Vistra Energy with an “overweight” rating, setting a $342 price target for Constellation and $178 for Vistra, indicating a potential upside of 22% and 31% from current trading levels.

Oklo and the Small Modular Reactor Market

Among the notable performers in the nuclear stock rally is Oklo, which recorded a staggering 104% increase in October alone and a 150% surge since the Microsoft agreement became public. However, after reaching a peak, it fell by 5% on Thursday. The notable investor interest has been illustrated through ARK Invest’s Cathie Wood, who has accumulated a position in Oklo worth over $2 million since July, and Peter Thiel’s significant stake in the startup.

Additional Players in the Nuclear Sector

Other companies in the SMR space, like Nano Nuclear Energy (NNE) and NuScale Power, experienced declines alongside Oklo; however, they previously witnessed notable increases. Uranium refiner Cameco (CCJ) also made headlines as it received recognition as one of the largest global suppliers of uranium, hitting a high of 7.8% earlier in the week. Meanwhile, Uranium Energy (UEC), engaged in uranium exploration in both the U.S. and Paraguay, saw a boost of 4.7% after receiving crucial regulatory approvals to enhance production capacity.

As investments in nuclear power and SMR technology continue to rise, it is clear that the nuclear industry is entering a transformative phase, driven by the confluence of technological innovation and the urgent need for sustainable energy solutions.