Oklo-OpenAI Energy Deal More Likely After Sam Altman Exit, Says Citi

synopsis

Oklo’s (OKLO) stock gained 0.7% in pre-market trade on Wednesday, reversing an earlier 3% drop after the company announced that co-founder Sam Altman would step down as chairman. 

The news, while initially surprising to investors, may pave the way for a key energy deal with OpenAI, according to Citi analysts.

In a research note cited by TheFly, Citi highlighted the leadership change as a potential catalyst for Oklo’s long-term prospects. 

While Altman’s “abrupt departure” caught investors off guard, Citi believes it could resolve any conflict of interest related to Oklo’s ongoing discussions with OpenAI about a potential energy supply agreement. 

The brokerage noted that given Altman’s dual roles at both Oklo and OpenAI, his exit could clear the path for a more strategic partnership in the future.

Citi maintained its ‘Neutral’ rating on Oklo’s stock, with a $30 price target, noting that the company has been actively seeking new board members and considering the separation of the CEO and chairman roles. 

Analysts expect the initial market reaction to be negative, but they emphasized that a deal with OpenAI could alleviate these concerns, driving positive sentiment and potential stock upside.

Meanwhile, H.C. Wainwright initiated coverage of Oklo with a ‘Buy’ rating and $55 price target, pointing to the company’s growing pipeline in advanced nuclear technology. 

It noted that Oklo has secured a 14 gigawatt (GW) pipeline, including a 12GW agreement with Switch, a data center developer, that extends through 2044.

Oklo’s stock has gained 1.4% year-to-date and surged over 70% in the past 12 months.

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