Tech giants investing in nuclear energy boosted uranium mining stocks, driving optimism in the sector

From NASDAQ: 2024-10-16 14:17:22

Uranium mining stocks surged, with Cameco up 8.2%, Denison Mines up 14.7%, and Energy Fuels up 17%. Tech giants like Microsoft, Alphabet, and Amazon are investing billions in nuclear energy, sparking optimism in the sector. This week, Alphabet and Amazon announced plans for small modular nuclear reactors to power their data centers, driving demand for uranium stocks.

Microsoft recently signed a power purchase agreement with Constellation Energy to reopen Unit 1 of the Three Mile Island nuclear power plant. Alphabet’s Google business is partnering with Kairos Power to open small modular nuclear reactors, while Amazon plans to build SMRs in Washington and Virginia. These projects could bring over 1 gigawatt of nuclear power online.

Should you buy uranium stocks now? Denison Mines is the cheapest, but Energy Fuels and Cameco have higher valuations. Cameco is profitable and free cash flow positive, with analysts expecting profits to triple. Energy Fuels is unprofitable but has cash reserves. Analysts hope Energy Fuels will be profitable next year and generate free cash flow in 2027.

Before investing in Energy Fuels, consider other top stock picks from The Motley Fool. Potential returns could be substantial, as seen with past recommendations like Nvidia. The Motley Fool Stock Advisor service offers guidance on building a successful portfolio with regular updates and stock picks. Suzanne Frey of Alphabet sits on The Motley Fool’s board of directors. The Motley Fool has positions in Alphabet, Constellation Energy, and Microsoft, and recommends Cameco.



Read more at NASDAQ: Why Cameco, Denison Mines, and Energy Fuels Stocks All Popped on Wednesday