What happened

Uranium stocks cruised through this week of August on a high note, with nearly every stock clocking double-digit gains. Despite cooling off a bit on Friday, here's how much popular uranium stocks had rallied in the week through 1:30 p.m. ET Friday, according to data provided by S&P Global Market Intelligence.

Energy Fuels (UUUU 2.29%): up 19.8%

Cameco (CCJ 0.16%): up 18%

Uranium Royalty (UROY -1.73%): up 16.6%.

Denison Mines (DNN -1.00%): up 15.2%

Ur-Energy (URG -4.73%): up 14.8%

NexGen Energy (NXE -0.13%): up 13.2%

Uranium Energy (UEC -1.78%): up 11.9%

Just when investors were starting to feel nervous about the prospects for uranium miners, a hugely unexpected development in the nuclear energy industry sent uranium stocks shooting for the moon. If things turn out as expected, the golden era for uranium stocks could be just around the corner.

So what

The nuclear disaster at the Fukushima Daiichi nuclear power plant in March 2011 pretty much closed the door on the uranium industry. Nuclear reactors run on uranium fuel, and with Japan shutting down all of its nuclear reactors in the aftermath of the disaster and several nations following suit, demand for uranium plummeted.

With uranium prices sinking lower and lower and showing no signs of bottoming, the world's largest uranium producers, Cameco and Kazakhstan's Kazatomprom, stepped in to slash production over the past few years to squeeze supply and support prices.

However, last week Kazatomprom announced plans to increase production in 2024 by almost 10%, or 2,000-3,000 metric tonnes more than previously planned.

Although Kazatomprom's move to increase production after years of production cuts confirms a long-due sustainable recovery in the uranium market, investors feared higher supply from the world's largest uranium producer will hit uranium prices. Uranium stocks, as a result, came under a bit of selling pressure.

Things turned around dramatically this week after the nation responsible for sounding the death knell on nuclear energy -- and uranium -- in 2011 revealed a marked shift in its energy policy and announced plans to revive nuclear to secure its future energy needs.

On Aug. 24, Japan's Prime Minister Fumio Kishida said the nation will not only extend the life of the 10 nuclear reactors currently in operation but also restart up to 17 idled nuclear power plants and build new ones as well.

It's a huge deal because the resurgence of nuclear energy in Japan could compel other nations to reconsider their stance as well. Already, more nations are drawing up plans to replace fossil fuels with clean energy after Russia's invasion of Ukraine sent global prices of oil and gas skyrocketing. Egypt, for example, is building its first nuclear plant, and Bloomberg this week reported India to be planning a mega-nuclear reactor as it strives to reduce reliance on coal for its power needs.

As more nuclear power plants come up, the rosier the prospects for uranium companies.

Now what

Companies like Cameco and Kazatomprom stand to benefit the most from any rise in demand for uranium and increase in its price, as they're the largest and most experienced players in the industry that can ramp up production as required.

Investors are also paying close attention to upcoming players like Uranium Energy, which beat Denison Mines in the race to acquire Canada-based miner UEX this week. Uranium Energy now has the largest uranium asset base in North America, including in the Athabasca basin, which is known for its rich high-grade uranium deposits. Uranium Energy is yet to generate its first revenue, but the UEX acquisition is a significant growth move and couldn't have come at a better time.

With the Inflation Reduction Act signed into law by President Joe Biden last week also earmarking investments in nuclear energy, the prospects for uranium miners haven't looked this good in several years now. And that's what investors in uranium stocks bet on this week.