Shares of Cameco (CCJ 1.37%) have more than doubled in a year. They are up nearly 200% over the past three years. And over the past five years, the gain is more than 650%! These numbers are more important than you may think, but not for the reason you may think.
Here's why some investors will find Cameco's stock well worth buying today and others may find now to be a bad time for an investment.
Image source: Getty Images.
What does Cameco do?
Cameco's business is best described as a "picks-and-shovels" operation serving the nuclear power industry. Historically, it mined for uranium and processed what it mined into the fuel needed to power nuclear power plants. More recently, it invested alongside Brookfield Asset Management in buying Westinghouse. Westinghouse designs nuclear power plants, helps to build them, and supports them with services once they are constructed.
At the end of the day, Cameco is all in on the nuclear power industry. It isn't a producer of nuclear energy. Still, as the nuclear power industry goes, so goes Cameco. With the addition of Westinghouse, of which Cameco owns about 50%, there are now two things to think about on that score.
Mining for and processing uranium is a commodity business, subject to the often-dramatic swings of commodity businesses. The services that Westinghouse provides are more stable cash flow generators. So, Cameco, which invested in Westinghouse in late 2023, isn't likely to be as volatile a business as it was prior to the deal.
But that doesn't change the very nature of the nuclear power industry, which is prone to periods of boom and bust. The use of the word bust could be seen as having a double meaning, since the busts usually arrive when there is a nuclear plant meltdown. The last notable event happened in 2011 when there was an accident at a nuclear facility in Fukushima, Japan.
What has happened before could happen again
The truth is that 2011 was a very long time ago at this point. And the huge price increases in Cameco's stock came off of the deep lows that occurred following that unfortunate event.
Meanwhile, the push toward clean energy alternatives has grown materially. Nuclear doesn't generate greenhouse gases, so it is an attractive clean energy option. That's buttressed by the fact that nuclear power is always-on energy, unlike intermittent wind and solar power. Nuclear's ability to provide baseload power to complement solar and wind makes it highly attractive.
The entire nuclear power industry is going through something of a renaissance. That's helped to push up the price of uranium higher and increased demand for the types of nuclear power services offered by Westinghouse.
In the second quarter of 2025, Cameco reported a 43% year over year increase in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) in its uranium operations. A 36% adjusted EBITDA increase in its fuel services division. And Westinghouse went from losing money to earning money. Very clearly, the news is upbeat around Cameco right now.
NYSE: CCJ
Key Data Points
This is why some investors might want to buy the stock. And assuming things continue to go well for the nuclear power industry, Cameco could continue to thrive. Every new nuclear reactor is another potential customer. But conservative investors shouldn't ignore history.
If there is another nuclear plant meltdown, despite the industry having a long history of generally safe operations, there will probably be another downturn in the nuclear power sector. It is impossible to predict when, or even if, such an event could occur. And yet if it does, the damage on Wall Street will likely be swift and dramatic.
Cameco is a good nuclear option, but a risky one
If you are looking for a "picks-and-shovels" play in the nuclear power sector, Cameco is a very good choice. It is a generally well-run company that has, in recent years, diversified its business in an important way. You need to believe that the nuclear power industry keeps expanding, given the rise in the price of Cameco's stock, but that's not an unreasonable expectation.
If you are a risk-averse investor, though, the history of the nuclear power industry is probably a sign that you should look elsewhere for your next stock. The downside for a company entirely dependent on the success of nuclear power could be material if there is another nuclear accident, just like has happened several times in the past.
