fbpx
Stock Spotlight: What Does Cathie Wood Know That You Don’t?
Source: Dietmar Rabich via Wikimedia Commons 
By The Investment Journal • Contributor Writer
Friday Jan 24, 2025

Famed investor Cathie Wood’s ARK Invest made headlines earlier this week with a significant adjustment to its portfolio, notably selling off its holdings in small module reactor (SMR) tech company Oklo Inc. (NASDAQ: OKLO).

Oklo, a nuclear power startup backed by OpenAI’s Sam Altman, has surged recently, rising 20% to $31.25 on January 21 and an additional 6.6% to $33.27 early on January 22.

The company is up as much as 311.65% over the last six months, blowing away competitors in the uranium and nuclear energy space as well as indexes like the S&P.

Nuclear power start-up Oklo Inc. has outperformed the market over the last six months, handing certain investors significant returns. Source: Barchart.com

Notably, at the same time Wood was locking in her profits with Oklo, ARK Invest increased its position in Cameco Corporation (NYSE: CCJ), one of the world’s largest uranium producers.

It’s surely no coincidence that this repositioning happened a day after President Trump announced a potential $500 billion private sector investment to fund infrastructure for AI, including a joint venture called Stargate with OpenAI, SoftBank, and Oracle.

This AI infrastructure initiative is expected to dramatically boost electricity demand, with tech giants looking to nuclear power as an inevitable solution.

That “inevitability” could be why Wood has reconfigured her portfolio away from the explosive but unproven tech company (Oklo) to the staid but profitable commodity play (Cameco).

Though in the same general sector — nuclear energy — the two companies are an exercise in contrast.

Despite making certain investors a tidy profit with its triple-digit stock price growth, Oklo is pre-revenue and has no definitive sales agreements as of the time of this writing. And though the company’s investor materials note that it is making good progress toward its goals, it is still burning cash at the rate of approximately $24.9 million a year.

Compare that to uranium giant Cameco — a far more established company that is revenue positive (to the tune of $2.8 billion in the most recent fiscal year) with a profit margin of about 4.17%.

ARK Invest’s nuclear shuffle could simply be an exercise in locking in profits from a higher risk, higher reward investment then reallocating to a lower risk investment that still has the potential to outperform the market in general, as Cameco has done over the last 2-3 years.

But it is interesting to note that the strategy involves moving away from a specific technology and toward a company that is going to fuel that technology.

By way of analogy, it could be akin to selling Ford or GM in favor of investing in the one thing both companies’ products need: gasoline.

Oil and gas companies like Exxon and Chevron have provided investors with significantly more attractive returns over the last 35 years than automotive stalwarts like Ford and GM. Source: Barchart

ARK Invest’s partial divestment of a nuclear reactor tech company in favor of a uranium producer could be an exercise in risk reduction … or it could be a sign that Wood expects uranium producers to break out sooner rather than later.

Either way, one thing is for sure: One of America’s most famous investors appears to be bullish on the country’s nuclear future.

Enter your phone number and email to receive the latest market updates and insights.
By checking this box, I agree to receive updates, promotional materials, and other communications from The Investment Journal and its affiliates. I understand that my phone number and email address will be used for this purpose and that I can opt out at any time. My information will be handled in accordance with The Investment Journals's Privacy Policy.