Uranium Stocks Are Heating Up

They’re once loathed but now loved: uranium stocks have gone from hated to celebrated, but what’s prompting the shift in sentiment? After considering the imbalance of supply and demand for nuclear energy, smart-money investors are now adding uranium-bullish assets to their holdings.

One reason for the sentiment pivot is the global demand for energy, with India’s emerging middle class requiring more energy inputs than ever before. Sure, India and China can continue to rely on coal for energy production, but this is a “dirty” power source that’s frowned upon by developed nations.

Even in a supposedly wealthy country like the United States, electric bills are outrageously high and the government has only exacerbated the problem by constantly depleting the Strategic Petroleum Reserve. On top of that, years of underinvestment and government regulations have made it difficult for energy companies to drill fast enough to meet the demand.

Thus, even the staunchest pro-environmentalists can’t defend anti-nuclear energy positions anymore. Nuclear power is surprisingly clean, and fears of another meltdown are receding as the years pass and new incidents fail to materialize.

Moreover, the world recently got a reminder of how unstable the Middle East can be. The petroleum price blasted higher after Iran attacked Israel, and oil traders now have to wait in anticipation for Israel’s inevitable retaliation.

Courtesy: @TheMongrel_Cat

And then, you’ve got the fast-rising demand for artificial intelligence (AI) applications. As tech firms like NVIDIA and AMD develop more powerful AI-ready hardware, they’ll have to position themselves for a surge in demand for energy to power these energy-intensive applications.

NVIDIA, the king of AI hardware mega-caps, isn’t the only technology company prepping itself for the influx of demand for nuclear energy:

• Microsoft signed an agreement with Constellation Energy to restart a reactor at Three Mile Island.
• Google partnered with Kairos to purchase power from small modular nuclear reactors.
• Amazon is leading a $500 million funding round for another small modular nuclear reactor company, called X-Energy.

With these Big Tech firms getting on board, it’s easy to see why forward-thinking investors are putting nuclear energy leaders like Uranium Energy Corp. (UEC) and Cameco (CCJ) on their watch lists. Uranium stocks are the “new” AI trade in 2024, even though Crush the Street talked about these stocks long before the mainstream media finally caught on.

So far, Japan is taking a leadership position in advancing nuclear power and uranium production. This is happening as the years pass by and investors learn to move beyond the Fukushima incident, which took place back in 2011.

Courtesy: @duediligenceguy

Unfortunately, the current administration has allowed other nations, including Japan, to lead the way in nuclear power advancement. It’s quickly becoming an unavoidable national security issue as well as an economic issue.

The U.S. currently has 94 nuclear reactors, according to the Energy Information Administration. However, since the late 1980s, the collective generating capacity of those nuclear reactors has remained at around 20% of total electricity.

As traditional energy prices surge higher, governments and regulators will feel the pressure to enact nuclear-friendly policy. Sadly, it’s always the government rule makers who are the last to figure things out.

The mainstream media is also late in figuring out what’s a good investment and what’s not. They’re just now starting to chatter about uranium stocks, and that’s only because they’re going up.

Where were they when uranium prices were much lower? It really doesn’t matter, as AI-tech demand and other factors will push uranium stock prices much higher – and you don’t need the blessing of politicians or media commentators to position your portfolio accordingly.