Why Cameco Stock Soared Wednesday

Canadian uranium miner shares Cameo (CCJ 5.84%) generated solid total returns (including dividends) of 186% on the Toronto Stock Exchange (TSX) in the three years to June 30. Due to its strong performance, Cameco shares made it to the TSX30 2024 list, which was launched yesterday. The TSX30 is an annual list of the top 30 stocks on the exchange over a three-year period based on dividend-adjusted prices.

Cameco shares rode the wave of rising uranium prices during the period. With prices falling this year, the stock is also down double digits in 2024. However, Cameco shares made significant gains today, rising 6.8% to their highest point in trading through Wednesday at 1:50 PM ET, pending a potential move from Russia that could help uranium prices recover.

Uranium prices could recover if that happens

In a meeting today, Russian President Vladimir Putin asked the government to consider limiting the export of key commodities such as uranium, nickel and titanium in retaliation for US sanctions.

Russia is the sixth largest producer of uranium in the world, and the US and China are the top importers of uranium from Russia. Therefore, any restrictions on Russian exports could affect global uranium supply and help prices recover.

Uranium spot prices are currently hovering around their lowest level since November 2023 on fears of a supply-demand imbalance. Higher uranium prices will mean higher revenues and profits for miners like Cameco, which explains why the stock rallied today.

Should you buy Cameco stock now?

Uranium investors are already anticipating a rebound in uranium prices after Kazakhstan’s state-run uranium miner Kazatomprom cut its 2025 uranium production target in August. Kazatomprom is also the world’s largest uranium producer, so any move by the company has a big impact on uranium markets.

Today’s development gave investors in uranium, used mainly for nuclear power, another glimmer of hope. If prices recover, Cameco stock could be one of the biggest beneficiaries given the company’s strong industry positioning and strong balance sheet. In fact, Cameco has already seen an increase in long-term contracts from uranium fuel buyers for several months, and any rebound in uranium prices should act as a top for the stock.