We recently compiled a list of the 10 AI News You Probably Missed. In this article, we are going to take a look at where Oklo Inc. (NYSE:OKLO) stands against the other AI stocks.
AI Boosts Data Center Market to New Heights
According to Synergy Research Group, data center M&A activity set a new record in 2024, with deals totaling $57 billion, compared to the previous high of $52 billion in 2022. While 2023 saw a sharp decline to $26 billion, the rebound in 2024 included two major equity investments in Vantage Data Centers worth $9.2 billion combined. Moreover, equity investments in data center solutions providers, EdgeConneX and DataBank contributed to the rise. Private equity played a dominant role, accounting for 80-90% of deal values since 2021. With $29 billion in pending deals and a $15 billion future pipeline, the trend is expected to continue in 2025, fueled by increasing demand for cloud services, digital platforms, and generative AI.
Moreover, the firm believes that global spending on data center hardware and software in 2024 probably rose by 34%, reaching a record $282 billion. Public cloud infrastructure spending, up 48%, now makes up 55% of the market, due to the increasing demand for GPUs to support generative AI workloads. Enterprise spending also saw a significant 21% increase after years of marginal growth. According to Synergy, public cloud spending is expected to grow further and could reach 65% of the market within five years.
READ ALSO: 10 AI Stocks Making Waves on Wall Street and Top 10 AI Stocks on Wall Street’s Radar.
U.S. Boosts AI Infrastructure with New Executive Order
As the global AI infrastructure landscape is rapidly evolving, the U.S. is positioning itself at the forefront. On January 14, former President Joe Biden signed an executive order to boost U.S. leadership in artificial intelligence by fast-tracking the development of domestic AI infrastructure. The order directed the Department of Defense and Department of Energy to lease federal sites for gigawatt-scale AI data centers powered by clean energy, with developers covering all costs.
Requirements include using U.S.-manufactured semiconductors, adhering to labor standards, and ensuring AI safety and national security. Agencies will streamline permits, upgrade energy transmission, and support global AI infrastructure expansion while promoting clean energy technologies.
For this article, we selected AI stocks by reviewing news articles, stock analysis, and press releases. We listed the stocks in ascending order of their hedge fund sentiment taken from Insider Monkey’s database of 900 hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A Nuclear power plant with all its safety & security protocols in place.
Oklo Inc. (NYSE:OKLO)
Number of Hedge Fund Holders: N/A
Oklo Inc. (NYSE:OKLO) is developing next-generation nuclear power plants that recycle nuclear waste to provide clean, reliable energy, offering sustainable solutions for AI’s increasing energy demands.
Oklo Inc. has partnered with RPower, a provider of onsite power solutions, to create a phased energy plan for data centers. The plan starts with RPower’s natural gas generators to meet immediate energy needs within 24 months, then transitions to Oklo’s Aurora nuclear powerhouses as they become available.
Over time, Aurora powerhouses will provide most of the energy, while natural gas generators will serve as backups and support the local grid. The collaboration aims to provide a scalable and sustainable energy solution for data centers and other large energy consumers.
Overall OKLO ranks 10th on our list of the AI stocks that investors probably missed. While we acknowledge the potential of OKLO as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than OKLO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
