June was a fine month to be invested in uranium miner and nuclear energy services specialist Cameco (CCJ 2.50%). Nuclear received a significant boost from the Trump administration's One, Big, Beautiful Bill, which curbed subsidies and other advantages for producers harnessing rival energy sources. Developments elsewhere in the nuclear space also helped lift its stock.
Big and beautiful for the nuclear industry
The saga of Trump's bill didn't end until the president signed it into law in early July. Before that, however, it engendered controversy in several drafts by effectively bringing forward the expiration dates of federal subsidies that supported producers in the renewables segment, mainly solar and wind. Such measures survived, albeit in more limited form, in the final, passed legislation.
Image source: Getty Images.
Notably, nuclear energy emerged largely unscathed, as its subsidy regime was mostly unchanged.
While lawmakers were in the early argument (whoops, discussion) and debate stages of the bill, the nuclear energy got a little power surge from a deal engineered between the industry's Constellation Energy and social media giant Meta Platforms, owner of Facebook, Instagram, and WhatsApp.
Under the terms of the arrangement, Constellation will supply Meta's server farms with over 1.1 gigawatts of energy from its Clinton Clean Energy Center nuclear plant in Illinois. The term of the deal, which is to kick in next June, is 20 years.
This should sound familiar to nuclear energy watchers and Constellation investors, as it has some of the dimensions of the deal struck between Constellation and another tech titan, Microsoft. The pair signed a contract for the former to provide the latter with power from the once-notorious Three Mile Island nuclear plant in Pennsylvania.
Cameco was not directly involved in the Constellation/Meta agreement, but of course, as with that monster piece of legislation, any win for one nuclear company represents a victory for the sector as a whole -- at least as far as Mr. Market was concerned.
A good direct investment
One development that did directly affect Cameco was early June's news about a company it partially owns, privately held nuclear power company Westinghouse Electric. Cameco said it expects an increase of roughly $170 million in additional non-GAAP adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for both Westinghouse's second quarter and the full year 2025.
Cameco, which holds a 49% stake in Westinghouse, anticipates that the higher EBITDA will "be taken into consideration" when the latter determines the 2025 distribution it'll pay the former.
So in short, Cameco is benefiting from top-down legislative developments, the rising popularity of nuclear power, and the operations of an important investment. It's no wonder investors were so energized by its stock last month.
