Why Cameco Stock Is Up More Than 10% In 2 Days

Cameo (CCJ 4.71%) The stock’s rally from last Friday extended into this morning’s trading, with the uranium miner’s stock up 5.5% at its intraday high by midday Monday. Uranium stock is up nearly 12% in two days as of this writing.

The latest developments have fueled hopes of a resurgence in the nuclear power industry, and investors believe Cameco — a significant producer of nuclear fuel uranium — could be the best stock to play a potential recovery in uranium markets. He could be right.

The focus is again on nuclear power

This morning, 14 of the world’s banks and financial institutions pledged support for nuclear power at an event in New York City. Specifically, the banks support the Nuclear Triple Declaration endorsed by more than 20 countries, including the US, at last year’s COP28 summit to triple global nuclear power capacity by 2050.

While it is not yet clear how the banks will contribute, they could extend more financing to support the global nuclear power industry. Nuclear reactors, used in nuclear power plants to generate power, are expensive to build and lenders often shy away from financing them, given the complexity of building and operating reactors and nuclear power plants.

The banks’ support comes at a crucial time as nations around the world reconsider the potential of nuclear power to help tackle the climate change crisis. Just last week, the utilities giant Constellation Energy signed a 20-year power purchase agreement with the tech giant Microsoft. He later announced plans to restart a nuclear power plant that had been closed since 1979 in Pennsylvania.

Cameco stock is a solid bet on nuclear and uranium

Since nuclear reactors run on uranium fuel, Constellation Energy’s announcement sent uranium stocks soaring last Friday. Today’s fresh development sent Cameco shares even higher, as Cameco (along with Kazakhstan’s Kazatomprom) is one of the world’s largest uranium producers and has significant influence in the industry.

While the uranium industry won’t turn around overnight, demand for uranium should eventually increase as more nuclear reactors come online. Nearly 60 nuclear reactors are currently under construction and another 90 are planned globally, according to the World Nuclear Association’s latest report. Any increase in uranium demand and price should benefit Cameco given its industry position and financial flexibility.