Bear of the Day: Oklo (OKLO)

Oklo (OKLO) is a Zacks Rank #5 (Strong Sell) that is a nuclear company developing next-generation microreactors designed to deliver reliable, carbon-free power at a fraction of the footprint of traditional plants.The AI excitement around the future of small modular reactors and U.S. government support for clean energy has taken the stock from $20 to $190 just this year.While the stock has pulled back, investors might want to avoid any dip buying until earnings come out on November 13th. Estimates have been falling and with a valuation so high any disappointment on EPS or the outlook could take shares lower.About the CompanyFounded in 2013 and based in Santa Clara, California, Oklo is focused on designing and deploying compact fast reactors that use recycled nuclear fuel to generate clean, baseload electricity. Oklo aims to simplify nuclear deployment through factory-built modules and long operating cycles without the need for frequent refueling.With no commercial revenue yet and significant development costs ahead, Oklo remains in the early stages of execution, and investors are questioning whether its ambitious timelines can be met.The company has a market cap over $20B, with a Zacks Style Score of “F” in Value.Q2 Earnings MissEarnings aren’t the driver of this stock. Instead, the positive news that flows out daily surrounding AI and its energy needs is the driver. While there is a bullish path in powering AI, earnings will eventually matterLooking back on the Q2 earnings miss, OKLO posted a 50% EPS surprise on the downside. While management outlined progress toward filing its first combined license application with the Nuclear Regulatory Commission in early Q4 and expects an 18-month review process, commercial operations for its Aurora Powerhouse remain years away, currently targeted for late 2027 or early 2028.The company ended the quarter with $227 million in cash, boosted by a $460 million follow-on equity raise earlier this year, but continues to burn through operating cash at a guided pace of $65–$80 million for the full year.Since reporting earnings, Oklo has announced several bullish updates. The company was selected by the U.S. Department of Energy for its Reactor Pilot and Fuel Line Pilot Programs, both aimed at speeding reactor deployment and securing domestic fuel supply. Oklo also broke ground on its first Aurora Powerhouse at Idaho National Laboratory, a key step toward commercialization.With growing government backing and surging AI-driven power demand, Oklo is positioned to benefit from renewed momentum in nuclear development, though fuel supply risks remain a concern.And earnings aren’t there yet.Earnings Estimates Falling Ahead of EarningsInvestors should expect a lot of volatility when Oklo reports in mid-November.As we mentioned above, the earnings numbers wont be the catalyst, but any outlook into how projects are developing will be. That being said, we still need to watch the numbers.Earnings estimates are headed the wrong way across all time frames. For both the current and next quarters, we see only slight movement to the downside.But looking at the current year, estimates have dropped from -$0.42 to -$0.50 over the last 90 days.Technical TakeThe stock went parabolic, but has come down off the highs of $193. After a drop to the $110 area, there has been a bounce to $140, which is right where the 21-day MA resides.The 50-day was that $110 support and the 200-day is way down at $61.Chances are the stock trades between the 21-day and 50-day until earnings and we will then see an outsized move. Bulls should be cautious of those previous low breaks.In SummaryOklo has captured investor attention with its next-generation microreactor technology and ties to the AI energy story, but the stock’s run from $20 to $190 may be overextended. With no revenue yet, rising losses, and falling earnings estimates ahead of its November 13 report, the stock faces heightened risk if expectations are not met. While government support and nuclear momentum remain long-term positives, near-term volatility and valuation concerns make this one to avoid for now.For now, investors may want to consider locking in gains or reducing exposure and consider Bloom Energy (BE). The stock is a Zacks Rank #1 (Strong Buy) that is consolidating near recent highs. #1 Semiconductor Stock to Buy (Not NVDA)The incredible demand for data is fueling the market's next digital gold rush. As data centers continue to be built and constantly upgraded, the companies that provide the hardware for these behemoths will become the NVIDIAs of tomorrow.One under-the-radar chipmaker is uniquely positioned to take advantage of the next growth stage of this market. It specializes in semiconductor products that titans like NVIDIA don't build. It's just beginning to enter the spotlight, which is exactly where you want to be.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Oklo Inc. (OKLO): Free Stock Analysis Report Bloom Energy Corporation (BE): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks