Shares in a uranium, nuclear fuels and services company Cameco Company (CCJ 0.54%) rose 12.6% in October, according to data from S&P Global Market Intelligence. This decision comes in an improving context for actions aligned with the nuclear industry, and Cameco is the best way to achieve pure-play visibility to the publicly traded industry.

Feeling, not short-term gains

Some stocks trade based on quarterly earnings and their stock prices reflect an almost minute-by-minute commentary on quarterly sales or other similar metrics. Additionally, some stocks trade more on sentiment about their long-term growth prospects. Cameco is more of the latter type, and the good news is that there is a real sense of optimism around nuclear power right now.

Concrete facts support this optimism. For example, the growing demand for energy needed to operate data centers, promulgated by AI applications, has led IT giants to Microsoft, Alphabetit’s Google, and Amazon.com sign agreements to buy electricity from nuclear power plants this year. Microsoft signed a 20-year power purchase agreement with Constellation Energy which will restart the Three Mile Island nuclear power plant. Google signed a deal in October to purchase power from Kairos Power’s small modular reactors (SMRs), with both companies expecting Kairos’ first SMR to be online by 2023. Finally, Amazon signed an agreement to purchase electricity from Talen Energy.

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Cameco Company

This is excellent news for Cameco. The company supplies uranium and nuclear fuel for 37 nuclear power plants around the world, but 58% of its volume comes from America. As such, it has key exposure to the North American market, and as the main cloud service providers are US companies – Amazon Web Services, Microsoft’s Azure and Google Cloud – and the US dominates the cloud services infrastructure and data market. shopping centers, Cameco is well positioned to benefit from this in its domestic market.

Is the approach justified?

There is no doubt that there was a change of thought in the transition to clean energy, and natural gas and nuclear power are seen as playing a larger role than previously envisioned. Additionally, nuclear power does not produce carbon emissions, so investments from tech giants help them meet their emissions targets.

Image source: Getty Images.

That said, uncertainty remains on this subject. For example, US regulators recently blocked the Amazon/Talen deal on the grounds that it could divert electricity supplying the grid. This is an example of the obstacles that the nuclear industry must overcome.

Nevertheless, the trend set by technology companies is still in place, and the nuclear industry and, in turn, Cameco, appear to have a bright future.