Get In On This Nuclear Energy Swing Trade

I’ve been talking a lot lately about AI’s insatiable thirst for energy and how our existing sources just aren’t cutting it. There’s not enough of it.

That’s where nuclear power comes in. 

Historically, this hasn’t been a popular alternative… No one forgets Chornobyl, Fukushima, or Three Mile Island.

But the story has changed. Technology has evolved by leaps and bounds to make nuclear reactors safer than ever. And nuclear energy is cleaner and more efficient than anything else. 

In fact, Three Mile Island recently announced plans to reopen its nuclear plant and sell power exclusively to Microsoft for its AI business. 

But you can read about all of that in my recent blog post.

Or tune in to this week’s SteadyTradePodcast, where Matt McCall and I discuss the nuclear energy story.  

The podcast is totally free. Tune in right here!

I’m bringing up this subject again because I want to talk about one of the swing trades on my nuclear energy watchlist. 

And this company has an interesting story…, 

About not just how the company itself came to be, but how the stock started trading in the market.

I’m a huge fan of Sam Altman. 

If you don’t know who he is, he’s one of the smartest people out there. 

One of the highlights of his career was co-founding OpenAI with Elon Musk and some other major players. He’s considered one of the leading figures of the AI boom.

One of Altman’s latest endeavors is becoming Chairman of Oklo Inc. (NYSE: OKLO). I’ll get to that a bit later…

The History of Oklo Inc.: A Small Company with a Big Vision

Oklo Inc. started with a simple but incredibly ambitious idea—how can we bring nuclear energy into the 21st century? 

Founded in 2013 by Jacob DeWitte and Caroline Cochran, Oklo started with a vision that most people thought was crazy at the time: build small, safe, efficient nuclear reactors that can power the world cleanly and reliably.

While traditional nuclear plants are massive and take decades to build, Oklo wanted to whittle down that model. 

Its founders envisioned smaller reactors that would be not only cheaper to build but also faster to deploy and more sustainable. 

What Makes Oklo Different?

One of Oklo’s biggest innovations is its focus on using a specific type of reactor, called a fast reactor, that can run on nuclear waste. 

Yes, nuclear waste… The very stuff that everyone’s been worried about in the nuclear industry, Oklo sees as fuel. It’s like turning garbage into gold.

This technology makes their reactors incredibly efficient and reduces the need for fresh nuclear fuel. It’s a game-changer because it addresses one of the biggest criticisms of nuclear energy: the waste. 

If Oklo can commercialize this technology at scale, it could solve the waste problem while providing clean, reliable power.

From Concept to Reality

In 2020, they became the first company to submit an application to the U.S. Nuclear Regulatory Commission (NRC) for a commercial advanced reactor. 

Their project, called the “Aurora” power plant, is a small, 1.5-megawatt reactor designed to supply power to remote locations, like off-grid communities or industrial sites.

In December 2020, the NRC accepted their application for review, which was a significant milestone. 

In the meantime, Oklo’s been actively securing deals to move its vision forward, including partnerships with government agencies and private energy companies.

Why I Love Oklo

Unlike the massive utility companies that have dominated the nuclear space for decades, Oklo operates more like a tech startup. 

It’s nimble, innovative, and is tackling the energy problem from a completely different angle.

Oklo is a disruptor in the industry.

As traders, we love disruption. We look for companies that aren’t just following the status quo but rewriting the rules of the game. 

Oklo is doing just that by focusing on small reactors, using waste as fuel, and pushing through the regulatory barriers that have kept nuclear energy from evolving for years.

The Story of How Oklo Became a Tradeable Company

Oklo didn’t just have a traditional Initial Public Offering (IPO) like the majority of publicly-traded companies. Instead, it became part of a SPAC.

So what’s a SPAC, you ask?

A Special Purpose Acquisition Corporation, or SPAC, is essentially a shell company. 

I know the term “shell company” brings up bad memories of Enron and the like, but hear me out…

A SPAC is formed specifically to raise capital through an IPO. Its goal is to merge with a private company and take it public.

The whole point of a SPAC is to bypass the traditional IPO process. It’s like a shortcut to the public markets. Traditional IPOs are slow and require a lot of paperwork and red tape.

 With a SPAC, a private company can go public a lot quicker and with less hassle.

Here’s how it works:

The IPO: First, the SPAC goes public. But it’s just a shell company with no operations, products, or revenue. It’s just that, a shell. 

Investors are betting on the management team’s ability to find a solid private company to merge with. Investors trust the SPAC’s sponsors (the people behind the SPAC) to pick a winner.

The Search: After the SPAC raises money through its IPO, it has a limited amount of time—usually 18 to 24 months—to find a private company to merge with. The whole point is to take that private company public.

This is where Sam Altman becomes a big part of the story. He is the CEO and co-founder of AltC Acquisition Corp, which happens to be the SPAC that acquired Oklo.

Remember what I said above about the need for investors to have faith in the SPAC’s management?

Well, I would place my bets on whatever Altman is behind.

And a lot of investors did. 

The Merger: Once the SPAC finds its target, the two entities merge, and boom! The private company is now public. 

By the way, this merger is, funnily enough, called a de-SPAC. 

Here’s an illustration of the timeline for a SPAC:

Why Is OKLO on My Nuclear Stock Watchlist?

Oklo is challenging the old-school nuclear energy model with something that’s more flexible, sustainable, and scalable.

Also, now that Oklo is public, Altman is Chairman of the Board of the company. 

Not only that, he owns roughly 6% of the company.

All good things!

And honestly, even if I didn’t know what Oklo did, I daresay I would buy it anyway just because Sam Altman is involved!

As I’ve repeatedly said during my Premarket Prep and all of my StocksToTrade Advisory webcasts, nuclear energy stocks are hot right now, and Oklo is one of the best of the group. 

OKLO is currently trading alongside its Volume-Weighted Average Price (VWAP), an indicator I use constantly. If it starts to trade above that level, I think it could spike into the low teens.

Below is the chart of OKLO between Wednesday and yesterday.

On a longer-term basis, I see it reaching its highs from April and May.

OKLO is a swing trade, not a day trade. I think this thing will be a big winner, but it will take longer than 24 hours.

If you’re interested in swing trading, the sweet spot between volatile day trading and a long-term buy-and-hold strategy, you should check out our IRIS AI system.

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Have a great weekend, everyone. See you back here on Monday.

Tim Bohen

Lead Trainer, StocksToTrade