The manufacturing sector stands at the cusp of its fourth major transformation. Known as Industry 4.0, or the Fourth Industrial Revolution, this shift combines artificial intelligence (AI), robotics, and connected devices to create smart factories and automated production systems.
Steam power launched the first industrial revolution, electricity drove the second, and computers sparked the third. Now, the fourth revolution merges digital technology with physical production in ways that blur the line between human and machine operations.
Image source: Getty Images.
This digital transformation demands massive amounts of reliable, sustainable energy. As factories become more automated and data-driven, their power needs grow exponentially. Traditional energy sources struggle to meet these demands while satisfying environmental requirements. Two companies stand ready to power this technological revolution while advancing sustainability goals.
These two companies have emerged with bold plans to power Industry 4.0 -- one through next-generation nuclear reactors, the other by unlocking America's largest lithium deposit. Both carry significant risks, but their potential impact on U.S. energy independence makes them worth watching. Read on to find out more about these two cutting-edge energy stocks.
Small reactors, big ambitions
Remember when nuclear power meant massive cooling towers and billion-dollar mega plants? Oklo(NYSE: OKLO) wants to change that perception entirely. The company's Aurora powerhouse represents a new approach to nuclear power, designed for rapid deployment and scalability, compared to traditional plants that take a decade or more to build.
Global demand for small modular reactors (SMRs) continues to surge. The market grew to $6.66 billion in 2022 and shows no signs of slowing, with projections pointing to $13 billion by 2035. Developers worldwide have launched more than 70 commercial SMR designs, creating an increasingly competitive race for market leadership.
Oklo has moved quickly to strengthen its position, landing a preferred supplier agreement with Siemens Energy for steam turbine generators and securing Wyoming Hyperscale as a customer for its data center operations. The company aims to bring its first Idaho reactor online by 2027.
Yet Oklo faces significant challenges ahead. The company continues to burn cash and will likely do so for years, with profitability remaining a distant milestone. While innovative, its reactor design must still prove itself commercially. The Nuclear Regulatory Commission's review process for new reactor designs can stretch for years, and any setbacks in safety validation or performance testing could push commercialization further into the future.
For investors willing to embrace high risk for potentially transformative rewards, Oklo offers a pure play on next-generation nuclear power. Success could position the company as the Tesla of nuclear energy, transforming how we think about atomic power generation. But like any moonshot technology, investors should size their positions appropriately and prepare for a volatile journey.
American lithium breaks new ground
The global race for lithium has found an unexpected frontline -- northern Nevada. Here, Lithium Americas(NYSE: LAC) has begun transforming its Thacker Pass site into what could become a cornerstone of North American battery production. The Department of Energy clearly sees the potential, backing the project with a $2.26 billion loan to build processing facilities capable of producing 40,000 tonnes of battery-grade lithium carbonate annually.
General Motors recently committed $625 million for a 38% stake in the project. This partnership arrives as global lithium demand accelerates. Industry projections show the market soaring from $22.48 billion in 2024 to $155.7 billion by 2035.
Despite construction starting in 2023, significant work remains. Engineering designs sit at 40% completion, and production won't begin until 2027. The company holds $341 million in cash, but developing North America's largest lithium resource demands substantial capital and careful execution.
Yet for investors seeking exposure to domestic critical minerals, Lithium Americas offers something unique -- a pure-play bet on American lithium production backed by both federal funding and a major automaker. The company's success or failure at Thacker Pass could reshape battery supply chains across North America.
The fourth revolution demands reliable power
The Fourth Industrial Revolution's appetite for clean, reliable energy creates opportunities for bold investors. While both Oklo and Lithium Americas carry significant risks typical of early-stage companies, they offer pure-play exposure to critical segments of tomorrow's energy landscape.
Oklo's nuclear innovation and Lithium Americas' domestic mineral production could prove transformative for U.S. energy independence. For investors willing to embrace volatility in pursuit of potentially outsized returns, these speculative energy plays warrant consideration as small positions in a diversified portfolio.
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George Budwell has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool recommends General Motors and recommends the following options: long January 2025 $25 calls on General Motors. The Motley Fool has a disclosure policy.
