What happened

Uranium stocks went nuclear on Monday, with shares of Denison Mines (DNN -3.74%) surging 10.2%, Uranium Energy (UEC -4.50%) rising 10.6%, and Energy Fuels (UUUU -3.60%) closing 14.3% higher.

It's not hard to figure out why: Uranium prices are way up.

Cartoon picture of two nuclear reactors generating steam in dark shades

Image source: Getty Images.

So what

As OilPrice.com reported over the weekend, the spot price for U308 (triuranium octoxide, also known as yellowcake, and the most stable form of uranium oxide found in nature) last week surged past $30 per pound for the first time this year, approaching its highs of last year.

Investment banks BMO Capital Markets and Morgan Stanley both believe that uranium prices have set a floor, and are unlikely to fall back below $30. To the contrary, the analysts are predicting that uranium will continue to rally, and could hit $50 by 2024.

The reason: According to energy experts, it's unlikely that the Biden Administration will be able to succeed in its goal of converting America's economy to clean electricity without building more nuclear power plants and feeding them with uranium. Moreover, experts for the European Union are also said to be advising EU governments to classify nuclear energy as sustainable, and thus qualifying for investment as a form of green energy.

Now what

Nor does the good news stop there. Last month, China unveiled its 14th five-year economic plan, which includes plans to increase nuclear power capacity from 48 gigawatts presently, to 70GW by 2025.

With 50 new nuclear power plants under construction around the world already, and more on the way, demand for uranium is predicted to rise over time. Meanwhile, production at some major mines is currently either shut down entirely or temporarily suspended due to COVID-19, creating a supply-and-demand imbalance that is working to push prices higher. Investors are betting that uranium mining stocks like Denison, Uranium Energy, and Energy Fuels will benefit -- and they're probably right about that.