Reactors and reactions

As the recent tech pullback showed, trading short-term market momentum is a give-and-take business. Many of the stocks that were mostly responsible for propelling the market off its April lows also suffered the biggest setbacks in November.

Tech may have been the pace car for the April-October rally, but plenty of stocks were along for the momentum ride. And some of them lapped the biggest tech gainers more than once around the track, including Oklo (OKLO), which rallied more than 600% before tumbling more than 50% to its November low:

The Small Modular Reactor (SMR) company likely popped up on plenty of trading screens Thursday because of its double-digit percentage gain, which extended its bounce off a former breakout level (above the August high, dashed line).

While few traders and investors probably anticipated OKLO’s swings—up or down—this year, such volatility may be more understandable in light of the current status of SMRs, a type of scaled-down nuclear reactor that originally attracted attention for their potential role in satisfying the insatiable energy demands of AI data centers.

While Morgan Stanley & Co. analysts have characterized this technology as “promising,” they also describe it as potentially expensive and “next-decade”—literally, unlikely to be deployed in the US until the 2030s.¹ (Currently, there are only a handful of operational models globally.) In a sense, OKLO's rally and subsequent correction may reflect enthusiasm (possibly exaggerated) about a very real energy-demand story, countered by the reality of currently negative earnings and a “product” that is at least a half-decade from hitting the market.

Also, SMRs are only one potential part of the “nuclear rennaissance” story. As Morgan Stanley & Co.’s analysts point out, more efficient “fourth-generation” (Gen-IV) reactors and those that use alternative fuels (such as thorium), likely have a significant role to play. Two of the companies they highlighted in this area, GE Vernova (GEV) and Curtiss-Wright (CW), may not have matched OKLO’s rally this year, but they also didn’t match its correction:

OKLO’s rally on Thursday shows bulls haven’t necessarily abandoned the stock, but the past several months show that momentum is often a double-edged sword. The “hotter” a move is, the more susceptible it can be to a sharp reversal—a reality to keep in mind, especially when making decisions about longer-term positions.

Market Mover Update: On a flattish Thursday for US stocks overall, the Russell 2000 (RUT) small-cap index rallied nearly 0.8%. The RUT has slightly outperformed the S&P 500 (SPX) over the past eight months, and now trails the SPX by just three percentage points for the year.

Today’s numbers include (all times ET): PCE Price Index (8:30 a.m.), personal income and spending (8:30 a.m.), Consumer Sentiment (10 a.m.), factory orders (10 a.m.).

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¹ MorganStanley.com. The Nuclear Renaissance Is Here—What's Next? 8/15/25.