Investors who bought shares of Oklo (OKLO 12.73%) before its stock surged 50% in mid-September were probably thrilled when share prices of the nuclear reactor start-up hit $142 on Sept. 23.

They — along with anyone who jumped in on Sept. 23 — probably weren’t feeling quite so festive at the end of that week. The company’s shares crashed below $111 on Sept. 26. They’ve risen a bit since then, but it’s fair to ask whether the company’s stock price slump is here to stay.

Here’s why investors shouldn’t worry about the recent slump, even if the stock continues to be volatile.

Image source: Getty Images.

It’s a hard-knock life

Startups often experience big swings in share price, and Oklo is one of the “start-uppiest” start-ups you’ll find in the nuclear energy space.

Founded in 2013 by two MIT graduate students, Oklo went public via a merger with one of artificial intelligence (AI) guru Sam Altman’s special purpose acquisition companies (SPACs) in May 2024. It has big plans for a small modular nuclear reactor (SMR), but it hasn’t actually built even a working prototype of one, let alone made money from one. So it’s a very speculative stock, and not a good choice for risk-averse investors.

Given all the question marks surrounding Oklo’s potential as an investment, it’s unsurprising that the stock has seen some big swings in valuation, including the recent dip.

Betting on the tech

In addition to being a start-up operating in a relatively new and untested technology sector, Oklo’s proposed SMR differs from the “standard” SMR design.

Oklo is building a sodium-cooled “fast reactor” SMR, which is a niche type of reactor, even for the SMR space. Full-size fast reactors have been shown to be more efficient than the traditional water-cooled reactors used in most nuclear plants, and Oklo believes that these benefits could carry over to the SMR versions. In theory, they could be powered using spent fuel from existing reactors instead of fresh enriched uranium fuel, which would be an added benefit.

But none of this has yet been borne out under real-world conditions. Until it is, expect more volatility.

Small news, big impact

One reason these factors are likely to cause such wild swings in Oklo’s stock is that there’s not a lot to go on as far as company valuation. It’s too early for traditional valuation metrics like price-to-sales or price-to-earnings ratios. There’s not a lot the company can report about operational progress yet. That means minor news reports and rumors are all investors have to go on in many cases. As speculators pile in and out of the stock based on these tidbits of information, the share price swings wildly.

Take, for example, the news that Oklo held a groundbreaking ceremony for its first-ever Aurora Powerhouse SMR in mid-September. News reports about that groundbreaking caused the stock to abruptly skyrocket. But the groundbreaking was hardly a secret: The company had been saying for months it was expected to occur in the third quarter of 2025 (which it did). It had completed site characterization in May and selected a builder in July. The project is part of a government program with a proposed end date of July 2026. Anyone could have predicted that a groundbreaking was imminent. But news that it happened sent the stock soaring:

Similarly, the drop in share price since the groundbreaking is likely caused by investors taking profits after a massive stock run-up. The important thing to remember is that there seems to be plenty of upside for Oklo’s stock from here, if it can actually deliver on its technology. If you’re a risk-tolerant investor looking for a nuclear energy stock that could soar, it may be a good time to consider buying the dip.