tah79

commented on a stock ·

10-Year Serious Hold Candidates

Having had time off and seeing that the unrealized gains on OKLO have halved over the past month, I took the opportunity to organize my thoughts.

I apologize for the long series of posts again, as it ended up being quite lengthy.

This is half-muttering aimed at those considering long-term holdings, so I ask for your understanding regarding comments like 'This is so long, lol'...

First, let me clarify my position. I am investing with a limited budget, and due to OKLO’s significant rise this year, my portfolio has become extremely skewed towards OKLO. My stance now is not to aggressively buy more but rather to figure out how to maintain my holdings for the long term without significantly reducing the number of shares.

I am not an expert in nuclear or quantum technologies. I once spent considerable time researching quantum computing, and since I currently have acquaintances in quantum research, I would say I have slightly better access to information than the average person, but only to that extent.

Therefore, please consider what I am about to write as merely the opinion of an amateur who enjoys researching.

Some people who strongly recommend quantum-related stocks might feel offended by certain parts, but I would appreciate it if they could take it as, 'There are people who view risks this way.' Conversely, experts in nuclear power may find many points to critique, thinking, 'This part is too optimistic' or 'This is a misunderstanding,' so I would greatly appreciate feedback in the comments.

Now for the main topic. Seeing Jim Cramer lump quantum and nuclear power together while discussing them in the context of 'speculative magic stocks' made me feel quite uncomfortable. (Didn’t you also recommend buying these not too long ago...)

Although they may both appear to fall under the category of 'deep tech,' I believe that the nature of the risks and the timelines involved are quite different between pure-play quantum hardware startups and SMR/OKLO.

As for quantum, I clearly distinguish between 'quantum hardware' and 'quantum software' in my mind. To be honest, simply labeling something as a 'quantum stock' without separating these two aspects already makes the discussion somewhat precarious.

Particularly with pure-play quantum hardware startups,

• They remain in a prolonged 'research institute business' state where R&D expenses exceed revenue.

• The path to achieving fault-tolerant quantum computing (FTQC) remains distant when considering the challenges in physics, engineering, and funding.

• Only a small number of approaches and companies will succeed, and the shares of those that don’t make the cut could literally become worthless. (Many startups have yet to go public, and there is a high likelihood that winners won't emerge from among currently available stocks. Personally, I think the probability that the leading superconducting approach will prevail is not particularly high...)

This is how I view their structural situation.

If you really want to invest in quantum hardware, it would be more realistic to back companies like IBM or Google, which have quantum divisions within their larger corporate structures. However, in such cases, quantum would only represent one division within the entire company, so the narrative of 'a tenfold return based solely on quantum' would not hold.

On the other hand, I believe that pure-play startups like IonQ can be a viable multi-year money game based on thematic momentum. Assuming one sells strategically while conditions are favorable, I do not dismiss speculation in quantum computing.

What concerns me is the somewhat thought-stopping sentiment seen on social media that 'quantum is the future, so it’s best to hold onto investments for 10 years.'

In reality, AI advancements are progressing so rapidly that even areas once considered exclusive to quantum computing, such as certain chemical calculations and material explorations, are increasingly being addressed by classical computing combined with AI. More experts are beginning to believe that the domains where 'only quantum computing can solve the problem' may be narrower than expected.

While I do not deny the potential of quantum computing itself,

"the quantum market 10 years from now is guaranteed"

is something I find difficult to assert at this point in time.

Therefore:

• While I understand that pure-play quantum hardware can be part of a momentum-driven money game,

• I cannot support the idea of 'I don’t fully understand it, but since it might become the next NVIDIA, I’ll just hold onto it for 10 years.'

This is my stance on the matter.

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On the other hand, we have a completely different perspective on SMRs, particularly OKLO.

As I mentioned in my previous post, reports such as the World Energy Outlook indicate that it is almost a consensus that future electricity demand will certainly increase due to EVs, heat pumps, industrial needs, and data centers/AI.

Renewable energy alone faces challenges related to variability and grid stability, while new constructions of existing large-scale nuclear reactors are difficult to advance due to cost overruns and delays.

• Does not emit CO₂

• Can serve as a stable baseload power source

• Ideally, can be made compact and modular for easier deployment

SMRs are being discussed quite seriously as a candidate that meets these criteria, and it is widely recognized that SMRs are among the best potential solutions to the impending power consumption crisis. The likelihood of market growth for SMRs appears much higher compared to quantum technologies.

The positioning of nuclear technology itself also differs from that of quantum technologies.

Whether it's large reactors or fast reactors, the fundamental physical principles have been proven for decades, leaving almost no uncertainty at the level of 'Can we really generate power with this physics?' What remains challenging is...

• Design and engineering

• Regulatory approvals and permits

• Fundraising and project finance

• Social and political acceptance

I believe these represent the hurdles as an infrastructure business.

The reason I described OKLO as a '10-year long-term hold candidate' is that, in addition to these factors, I find their business model design quite convincing.

A small-scale fast reactor,

to be installed at existing sites or data centers,

is not aimed at outright power sales but rather offered as a long-term electricity service.

This is my understanding of the company’s targeted business model.

Considering the growing demand for stable power sources for data centers driven by the growth of AI and cloud computing, this direction is quite logical. Additionally, the concept of fuel reuse holds significant geopolitical value.

Of course, OKLO also faces numerous uncertainties,

• How smoothly the regulatory process will proceed

• Cash flow management in the event of project delays

• Risks associated with additional capital increases or share dilution

• The possibility of being acquired by major utilities or big tech companies in the end

All of these are realistic risks, and it is by no means a situation where one can say, "If I just hold OKLO, I’m guaranteed safety."

I do not have blind faith in it, and I recognize that "this is still a fairly high-risk deep-tech stock."

Nevertheless,

• Structural growth in electricity demand

Even at the international organization level, nuclear power and SMRs are being reevaluated as realistic options.

The business model and direction of OKLO are logically and commercially compelling within this trend.

Considering these points, compared to dedicated quantum hardware startups,

it is easier to envision a viable business over a 10-year horizon.

This is my current perspective.

⸻

I do not intend to dismiss investment or speculation in quantum technologies; in fact, I believe it is a valid strategy to capitalize on short- to medium-term momentum for profit-taking. However,

in quantum hardware, the number of winners will be limited, and losers could end up with virtually worthless assets.

Advancements in AI could narrow the 'unique opportunities' for quantum technologies.

The quantum market 10 years from now is not guaranteed.

Without considering the underlying assumptions, simply declaring 'The next NVIDIA!' and blindly holding onto it for 10 years is, in my view, quite risky.

On the other hand, SMR, particularly OKLO,

• Is at the center of a major trend involving structural changes in electricity demand and the reevaluation of nuclear power.

• While there are numerous challenges, it is clear what problems they are trying to solve, and both the principles and business aspects are easy to envision.

• For these reasons, I personally find it reasonable to refer to it as a '10-year long-term hold candidate,' provided one understands the risks involved.

The above was a personal musing from an individual with a portfolio heavily skewed towards OKLO.

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