Why Did Oklo Stock Pop Today?

Shares of Oklo (NYSE: OKLO) climbed on Friday, finishing the day up 6.5% even as the S&P 500 and the Nasdaq Composite lost significant ground.

Investment bank Canaccord Genuity initiated coverage of Oklo on Tuesday with a buy rating. The stock is still seeing momentum as the coverage follows on the heels of the nuclear energy company's recent selection for a new Department of Energy (DOE) pilot program.

Canaccord believes in Oklo

Canaccord initiated coverage of Oklo stock earlier this week. The bank gave it a buy rating and set a price target of $175, which still represents a significant upside from Oklo's current level, even after the stock gained in the days since.

This follows the company's recent selection by the DOE for its Advanced Nuclear Fuel Line Pilot Project aimed at advancing nuclear fuel technology that will see the company "build and operate three fuel-fabrication facilities to support the deployment of advanced reactors."

Image source: Getty Images.

Oklo still has to prove itself

Nuclear energy is experiencing a renaissance of sorts, and Oklo is in a great spot to meet the needs of power-hungry artificial intelligence (AI) data centers -- if it delivers. It's important to remember the company is still developing the technology.

The company's valuation is becoming quite lofty, which makes me nervous, but I do think it can be justified if it delivers on its promise; if you have a high risk tolerance, Oklo is a solid pick.

Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.