Tedards opined in mid-May 2024 that Oklo is a small modular reactor (SMR) company that has ties to Microsoft. It has multimillion-dollar deals and offers from data center provider Equinex. And it has an early investment from Open AI CEO Sam Altman. In many ways, Oklo’s story is maybe even more compelling than Amazon’s was 27 years ago. As AI continues to explode and expand globally… the demand for more power-hungry data centers seems inevitable at this point. And a clear solution lies in this SMR nuclear power technology.
When Tedards covered Oklo last month, shares were trading over $15 per share. Today’s shares have fallen under $10. At the time, he advised you to pause before jumping into the nuclear-powered AI hype, and this decision was very straightforward. First, while nuclear power is extremely efficient and ideal for AI data centers, Oklo is still years away from generating any meaningful revenue… let alone turning profits for investors. The company’s early public offering is primarily a strategy to raise funds for future projects in research and development.
Second, Oklo is one of those blank-check or SPAC companies that have generally performed poorly in recent years. Data shows that nearly every sector has negative returns after a SPAC deal closes. These SPAC deals, especially in the early stages, are designed to benefit Wall Street insiders and not you.
Investing in these early-stage SPAC companies isn’t like buying Amazon in 1997. It’s more like gambling in the Las Vegas casino. Tedards enjoyed a weekend in Vegas as much as anyone… but Tedards doesn't go there to build wealth. In the first three months of this year, Oklo burned through more than $1.2 million and had zero revenue.
Tedards strategy is to wait for the hype around these new energy sources to die down while continuing to capitalize on the growing popularity of AI. If SMRs become popular, they’ll enable AI data centers to expand without constraints and at lower operating costs. That will lead to greater profitability for software providers developing the next generation of websites and applications.
Additionally, it’ll probably benefit Amazon, which generates most of its profits these days from selling computing power through its AWS division rather than selling books. Early-stage companies can be exciting. And the potential gains can be life-changing. But the truth is that Amazon has been a once-in-a-lifetime jackpot that rarely happens on Wall Street.
Tedards emphasized this many times here on the newsletter… and he'll leave you with this thought. It’s far, far better to be right about an investment rather than to be early.
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