To support the nuclear renaissance, invest in Cameco

Cameco, a supplier to the nuclear industry, stands to gain from the growing demand for carbon-free energy

A C£54 billion (28.8 billion) nuclear industry supplier, Cameco (Toronto: CCO, NYSE: CCJ) handles everything from uranium exploration, mining, refining, enrichment, and fuel fabrication to designing, developing, and maintaining reactors.

Geopolitical tensions can disrupt supply chains and impact share prices, as demonstrated by the Iran war and the subsequent disruption of gas and oil supplies. If China invaded Taiwan or Russia attacked the Baltic states, markets would plummet. In light of these uncertainties, investing in safe, dependable, carbon-free baseload power makes sense. The need for such power is also being increased by the development of data centers for AI.

These demands are satisfied by the renewed interest in nuclear power for baseload, carbon-free electricity. There are currently 436 nuclear reactors in the world, with 115 more planned and 70 more under construction. Additionally, 38 nations have pledged to triple their nuclear power output by the year 2050.

Cameco has uranium reserves in the US, Canada, Australia, and Kazakhstan, with most of its proven and likely reserves located in Canada. With 15% of the total, Cameco was the second-largest producer in 2025, with Kazatomprom holding the top spot with 20%. It is anticipated that by 2033, planned production will be less than demand, and by 2041, it will only meet half of demand. Instead of depending on the spot market, Cameco's approach is to develop a portfolio of long-term supply contracts with utilities. The 2030s are covered by the current contracts.

Additionally, Cameco owns a 49 percent stake in Global Laser Enrichment (GLE), with the potential to acquire a 75 percent ownership stake. GLE holds a global exclusive license for the third-generation enrichment technology known as separation of isotopes by laser excitation (SILEX).

Westinghouse Electric Company, a strategic partnership between Cameco and Brookfield Asset Management in which Cameco owns a 49 percent stake, handles the design, development, construction, and maintenance of Cameco's reactors.

Cameco's four growth factors.

Growth is anticipated to be driven by four factors. First, there will be a shortage of supply starting in 2030-2031 (which will increase quickly starting in 2033). This will result in higher prices and allow the company to increase production from its reserves. The cost of uranium has already increased. Compared to a miner, Cameco is able to capture a larger portion of the value added thanks to its fuel-manufacturing division.

Second, Westinghouse inspects, maintains, and supplies the expanding global fleet of nuclear reactors. The 185 new reactors that are being planned or built make up the third factor. Of Westinghouse's AP1000 reactors, six are currently in use, thirty are being built, and sixteen are scheduled. The fourth is the possibility of re-enriching depleted uranium and producing low-enriched fuel for upcoming light-water reactors using SILEX technology.

Revenue increased by 11% to £3.5 billion, adjusted EBITDA increased by 26% to C£1.93 billion, and adjusted diluted earnings per share increased by 321% to C£1.44 in Cameco's 2025 results through the end of December. According to first-quarter results, adjusted earnings per share increased by more than 100% to £0.47, while revenue increased by 7%. It states that committed uranium sales volumes for 2026 are between 29 and 32 million pounds (mlbs), down from 33 mlbs in 2025. However, prices are increasing; in the fourth quarter of 2025, the average price per pound was C£91.3, up from C£80.9 during the same period in 2024. Long-term contract prices are expected to be between C£131 and C£200 in 2026 and 2033, respectively.

Instead of catering to the spot market, Cameco concentrates on obtaining long-term contracts that account for rising demand and supply shortages. For instance, Cameco and India signed a nine-year contract in March 2026 for the supply of nearly 22 million pounds of uranium ore at market prices. The estimated value of this agreement is C£2.6 billion.

Cameco's stock price is increasing.

Cameco's stock value.

Long-term contracts and room for expansion across all divisions give Cameco stability. In terms of uranium mining, the majority of its reserves are found in Canada and other stable nations. In addition to manufacturing, converting, and refining fuels, the fuel services division profits from the growing need for nuclear reactors to produce baseload electricity with zero carbon emissions.

An additional growth engine for this division is Camecos' interest in GLE's third-generation laser-enrichment technology and its potential to acquire majority ownership. Additionally, it owns a 49 percent share in Westinghouse (WH), which is home to the proven AP1000 and AP300 reactors, as well as 30 more that are currently being built and others that are planned. Small modular reactors are also being developed by Westinghouse.

In order to power AI-heavy data centers, WH signed an agreement in October 2025 whereby the US government will help finance and construct new reactors in the US worth at least £80 billion. In contrast to the £8.2 billion Cameco/Brookfield paid for it in 2023, this increases the possibility of a separate initial public offering (IPO) for WH that could value it at £15 billion to £35 billion or more and result in a capital gain. For just £5.4 billion, the UK government sold to Toshiba in 2006.

With a one-year target of C£185, a forward yield of 0.19 percent, and a solid balance sheet with C£0.2 billion in net cash, Camecos' most recent share price is C£123. The forward price-earnings ratio is 46 for 2027 and drops to 36.3 for 2028. Over the course of a year, the shares have increased by 13.6%. It will play a significant role in the revival of clean, dependable nuclear power and is vertically integrated (from mining to reactor construction and maintenance). A long-term increase in the share price is suggested by the rising cost of uranium and the plans for new reactors around the world, as well as the potential for a capital return from a Westinghouse IPO.