Uranium mining stocks surged higher on Wednesday, with industry bellwether Cameco (NYSE: CCJ) rising 8.2% through 2:11 p.m. ET, Denison Mines (NYSEMKT: DNN) doing even better with a 14.7% gain, and smaller Energy Fuels (NYSEMKT: UUUU) performing best of all — up 17%.
Investors are betting on a resurgence in demand for nuclear energy, and their optimism is not without reason as tech giants like Microsoft (NASDAQ: MSFT), Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), and Amazon.com (NASDAQ: AMZN) are placing multibillion-dollar bets on the sector.
What’s going on with nuclear power?
Last month, Microsoft ignited the rally in nuclear stocks when it signed a power purchase agreement with Constellation Energy (NASDAQ: CEG) under which the latter will reopen Unit 1 of its Three Mile Island nuclear power plant. Microsoft needs extra power to run the servers at its Azure business unit, and thinks nuclear might be the best way to produce that power in a carbon-free way.
Momentum in the sector picked up this week with announcements from first Alphabet and then Amazon that they, too, are looking to nuclear energy to power their data centers.
Alphabet’s Google business is partnering with privately held Kairos Power to open a series of small modular nuclear reactors (SMRs). Totaling only 500 megawatts (MW) in power production capacity, the Google news is only half as big as Microsoft’s. (Full-scale nuclear power plants generally generate power in the gigawatt range). But that’s not why the Google news is significant. It’s backing an entirely new kind of nuclear power plants — SMRs, which are expected to be both cheaper and faster to build than traditional plants.
In theory, that could drive demand for nuclear energy — and for uranium to fuel it — faster than simply building more gigawatt-scale power plants would do. It’s this prospect that lies behind the strong interest in uranium producer stocks Wednesday.
Enthusiasm only grew greater Wednesday morning when Amazon announced plans to partner with Energy Northwest, Dominion Energy (NYSE: D), and privately held X-energy to build…
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