OKLO stock: is the Liberty Energy deal a game-changer for AI data centres?

Oklo Inc (NYSE: OKLO) soared nearly 15% on Wednesday after announcing a strategic alliance with Liberty Energy – a natural gas firm known for its field operations expertise.

This partnership is part of its broader commitment to a nuclear-powered future and aims to deliver scalable energy solutions to data centres, which are facing unprecedented power demands due to the rise of artificial intelligence (AI).

Including today’s rally, OKLO stock is up some 250% versus its year-to-date low in early April.

Why Liberty Energy deal means for OKLO stock?

OKLO views the Liberty Energy deal as a fresh chapter in its push to commercialise advanced nuclear technology.

“One of the things we see as a really important opportunity here is bringing gas in as a bridging solution to nuclear,” Jacob DeWitte, its chief executive told CNBC in an interview today.

DeWitte touted Liberty’s operational expertise as a key asset in delivering near-term power to data centers, while paving the way for future nuclear builds.

“It’s a huge combination … that makes it easier for customers to get power in a portfolio mix they really want,” he added.

Note that the deal builds on Liberty Energy’s earlier strategic investment in OKLO – effectively deepening its collaboration with the nuclear-tech firm.

The deal also builds on Liberty’s earlier strategic investment in Oklo, deepening the collaboration.

Following the announcement, OKLO shares printed a new year-to-date high on Wednesday.  

Why is OKLO team-up significant for Liberty Energy?

On the same CNBC interview, Ron Gusek – the top executive of Liberty Energy framed the team-up with Oklo Inc as a way to offer customers a comprehensive, lower-carbon energy mix.

According to Gusek, natural gas infrastructure can be deployed immediately while nuclear provides long-term baseload capacity.

The firm’s chief executive also stressed the importance of flexibility, especially in managing grid volatility, noting “natural gas has that ability to come on and off relatively quickly.”

The hybrid model allows data centres to tap into low-cost grid power when available, and rely on gas and nuclear when it’s not – creating a resilient and adaptive energy portfolio.

Note that OKLO stock is now trading at more than 12x its price in September of 2024.

Is there any further upside left in OKLO shares?

OKLO’s strategic partnerships with the likes of Liberty Energy and Diamondback Energy suggest real traction in commercialising its microreactor technology.

The artificial intelligence boom is driving massive energy demand, and Oklo’s hybrid approach could position it as a key player.

However, as with any emerging tech play, risks, including subpar execution, regulatory hurdles, and scalability, remain.

Plus, following its meteoric rally in the trailing 12 months, OKLO's stock valuation does look alarmingly stretched for a pre-revenue company.

And while Wall Street does have a consensus “overweight” rating on OKLO shares, they’re already trading well above the analysts’ mean target at the time of writing.