I've made no secret of my love of nuclear energy stocks or of my bullishness on one of them, Canada's Cameco (CCJ 0.13%), in particular. The reason is simple: Artificial intelligence (AI) is already voraciously devouring every free electron on the power grid it can, and, according to the International Energy Agency (IEA), AI-related power consumption is expected to double by 2030.
Nuclear energy offers a viable solution to this energy problem, as nuclear plants can generate electricity more reliably and efficiently while producing fewer carbon emissions than other energy sources, including green energy sources like wind or solar.
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Big tech companies like Microsoft and Alphabet seem to agree, as does the U.S. government. Both Microsoft and Alphabet have signed agreements with Constellation Energy and NextEra Energy, respectively, to help bring nuclear power plants back online for the express purpose of powering their data center needs. And the Department of Energy has said it hopes to triple America's nuclear output by 2050.
All the new (or refurbished) nuclear reactors America has planned need one resource in common to function -- uranium, the ore that can be refined for use in fission reactions that generate heat and boil water used to power turbines that generate electricity. And Cameco is sitting on some of the best uranium reserves on the planet.
Mining the future
Cameco's business is pretty simple. It mines and refines uranium for use in the nuclear industry. It owns Cigar Lake, the world's highest-grade uranium mine, and McArthur River, the world's largest high-grade uranium mine.
NYSE: CCJ
Key Data Points
That gives Cameco a competitive edge because the resources extracted from those mines need far less refining than what's extracted from lower-grade uranium deposits in places like Kazakhstan.
Cameco is the world's second-largest uranium miner by production. In 2024, it provided 17% of the world's uranium, a full 160 million pounds. The only larger producer is Kazakhstan's state-run Kazatomprom.
Finally, Cameco owns a 49% stake in Westinghouse, an engineering company that produces the most advanced nuclear reactor on the market, the AP1000. That's the same reactor that the U.S. government invested $80 billion into procuring last year. Now the U.S. has 10 AP1000 reactors planned for construction. And given Cameco's interest there, it's likely a safe bet that its uranium will be fueling those reactors.
The difference the spike in interest in nuclear power in the U.S. and around the world has made for Cameco is considerable. Over the last 10 years, it grew its revenue at a compound annual growth rate (CAGR) of 2.6%, but in the last three years, that has accelerated to a CAGR of 24.2%.
That growth has also helped Cameco achieve a gross profit margin of 36.3% and a net income margin of 15.2%, which is impressive, especially in an industry as capital-intensive as mining.
Couple Cameco's competitive edge in terms of its assets and its proximity to the American market with the fact that Canadian energy imports like uranium received a carveout in the Trump administration's tariffs, and I think you have a winning formula.
In the past 12 months, Cameco has beaten the S&P 500's return by a factor of 8, and given its accelerating revenue growth rate, I don't see its returns slowing down anytime soon. This one is definitely worth a look.
