Shares in Cameco Corporation (NYSE: CCJ) increased by 12.6% in October, according to data from S&P Global Market Intelligence. This rise occurs as sentiment improves for stocks connected to the nuclear industry, making Cameco an attractive opportunity for investors seeking exposure to this sector.
Long-Term Outlook Driving Stock Performance
While some stocks react strictly to quarterly earnings reports, others—like Cameco—trade based on their future growth potential. Currently, there is significant optimism surrounding nuclear energy, which fuels this sentiment.
This optimism is backed by solid developments. Notably, rising power demands from AI-driven data centers have prompted major companies like Microsoft, Alphabet‘s Google, and Amazon.com to engage in agreements for power sourced from nuclear plants. Microsoft entered into a 20-year power purchase agreement with Constellation Energy, which includes plans to restart the Three Mile Island nuclear plant. Similarly, this October, Google finalized a deal with Kairos Power to purchase energy from its upcoming small modular reactors (SMR), expected to come online by 2023. Lastly, Amazon has committed to buying power from Talen Energy.
Image source: Getty Images.
Cameco’s Strategic Position
The news bodes well for Cameco, which supplies uranium and nuclear fuel to 37 nuclear utilities globally, with 58% of its volume coming from the U.S. The company stands to benefit from its strong presence in the North American market, particularly as leading cloud service providers like Amazon Web Services, Microsoft Azure, and Google Cloud take the lead in infrastructure and data centers.
Assessing the Justification for Investment
The clean energy transition has shifted perspectives on nuclear and natural gas, which are now seen as increasingly crucial. Since nuclear power generates no carbon emissions, investments by tech giants will help them fulfill their sustainability goals.
Image source: Getty Images.
Despite these positives, challenges remain. For example, U.S. regulators recently blocked the Amazon/Talen agreement due to concerns about potential power grid disruptions. Such regulatory hurdles continue to pose risks for the nuclear industry.
Nonetheless, the overall trend towards nuclear energy remains positive, and Cameco appears to have promising prospects ahead.
Is Investing $1,000 in Cameco a Smart Move?
Before considering a stock purchase of Cameco, it’s important to evaluate your options:
The Motley Fool Stock Advisor analyst team has named the 10 best stocks to buy at this time, and Cameco is not among them. The stocks that made the list are expected to yield significant returns in the coming years.
For instance, if you had invested $1,000 in Nvidia when it was recommended on April 15, 2005, it would be worth $829,746 today!*
Stock Advisor provides investors with straightforward advice on portfolio building, timely updates from analysts, and two new stock picks every month. The Stock Advisor service has significantly outperformed the S&P 500 since its inception in 2002.*
See the 10 stocks »
*Stock Advisor returns as of October 28, 2024
John Mackey, former CEO of Whole Foods Market, now part of Amazon, is on The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, also serves on the board. Lee Samaha does not hold any positions in the stocks mentioned. The Motley Fool recommends Alphabet, Amazon, Constellation Energy, and Microsoft, as well as Cameco, and has the following positions: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool maintains a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
