Cameco's (CCJ 0.95%) management styles the company as a "pure-play investment in the growing demand for nuclear energy," and with good reason. Its mix of uranium mining, nuclear fuel services, and 49% interest in atomic reactor and nuclear plant services company Westinghouse makes it the best stock to buy to play the revival of nuclear power right now. That's a good thing because all the evidence points to momentum building in investment in nuclear power.
Nuclear power investment
After a period when policymakers were committed to the clean energy transition and all things renewable, there's a growing understanding that, while the transition is still taking place, it will take place at a slower pace than many previously thought. That means that energy sources such as gas are going to be a key part of the mix for many years to come.
The intermittency of renewable energy and its cost also mean that nuclear is becoming an increasingly popular option as a source of carbon-free energy.
It's well understood that power-hungry data center hyperscalers like Microsoft, Alphabet's Google, and Amazon.com are investing in nuclear power to solve their long-term power needs.
Government investment
At the same time, governments across the globe are investing in or reassessing the phasing out of nuclear energy, and that's a green flag I see. Cameco stock recently surged on news of investment in nuclear power plants in the Czech Republic; Belgium voted to pull back on phasing out nuclear energy; and Turkey is building nuclear power plants.
Image source: Getty Images.
These are just a few examples, and as the momentum grows, investors and analysts may need to start penciling in more optimistic assumptions for Cameco's addressable market. As long as that momentum builds, investors are likely to get behind the stock.
