Just Another Catalyst
The last twelve months have lifted Sam Altman and the term “AI” into stardom. ChatGPT amassed over 1 million users in the first two days of being available to the public and it currently has over 100 million users on the platform. Inside and outside of the financial world, AI and Sam Altman are used in conversations daily. Much like Elon Musk, the young entrepreneur has a following and everyone is waiting for what comes next.
Enter in nuclear energy.
Back in October 2022, I published a write up on Tetelestai Capital’s investment thesis behind nuclear energy and uranium. You can read the full post here. Since the post, the price of uranium has consolidated in a narrow price range and then began to inflect in March.
Chart 1: Price of Uranium from October 2022 - July 2023 (Source: Koyfin)
This price inflection has peaked my interest, but I am not banking on this being the rocket of a bull run that Nvida’s stock has seen recently. At least not yet. I believe we are still early into this bull market with many peaks and valleys along the way. However, something of note just occurred relating to the nuclear energy trade thesis. I believe this is the catalyst that gets the mainstream moving towards the nuclear energy investment thesis.
The A.I. Boom Feeding the Nuclear Energy Trade
2023 has proven better than most professional investors anticipated as technology stocks drove major market indices closer to all-time highs by July. The major catalyst of this movement has been the buzz word “Artificial Intelligence” and the man behind the craze has been Sam Altman. Without this technology boom, it would be a mediocre recovery year for markets, especially after the dismal 2022.
Chart 2: July 17, 2023 Year To Date (YTD) Returns for the S&P 500 Compared to the S&P 500 Returns Excluding the “Maginificent 7” Stocks (Source: Koyfin)
So how does AI tie into nuclear energy?
Oklo, a nuclear energy startup backed by none other than Mr. Sam Altman announced last week the planned SPAC merger to list the startup as a public company. I believe this is a major catalyst for the nuclear energy trade that has been developing. Not only is Sam Altman a household name with major hype around the work he does, but also his stamp of approval to the mainstream media of nuclear energy will bring many more hesitant investors into the space simply because of FOMO. This is no different than investors piling into AI companies with very little technical knowledge on the products other than how the products could make our lives more productive. Nuclear energy is an even easier concept to understand at a high level: nuclear energy at scale will provide sustainable energy beyond our modern dreams.
The story has not changed from last fall. If anything, it is getting better by the day, and the price of uranium continues to march higher. As more investors take notice, the nuclear energy boom will overshoot just like the technology bubble in the 1990’s and the nuclear energy boom of the early 2000’s. However, early investors are going to reap that reward far more than the investors who are late to the party. What is being established here is a global short squeeze of epic proportions.
Disclosure: Portfolios I control are long a basket of uranium investments at the time of this writing.
Note: This post consists of high level commentary on research conducted by Tetelestai Capital, LLC into uranium related investments. Though compelling, your own research should always be done before investing into any security. The risks mentioned in this post are not all encompassing either. This post should not be viewed as investment advice. Tetelestai Capital is not associated with any of the investment companies, pictures, or products mentioned in this post. If you have any questions about the research Tetelestai Capital conducts, please reach out through the website for more information.