With tight supply and growing demand for nuclear energy, uranium stocks to buy could glow. For one, supply could get even tighter with the Russian uranium ban starting on August 11. According to Swiss Resource Capital, about 90 new nuclear plants are being planned, 61 are under construction and decommissioned sites are being revived.
Third, the artificial intelligence boom requires a lot of energy, and uranium could help fuel the need. AI data centers need a tremendous amount of electricity.
According to McKinsey, data center demand could grow about 10% yearly. Also, according to the International Energy Agency, in 2022, 2,700 data centers needed about 4% of U.S. electricity. By 2026, we added the IEA, which could soar to 6%. Goldman Sachs says that could be closer to 8% by 2030.
That being said, it comes as no surprise that tech companies are in talks with nuclear power plants to help meet the explosive needs of AI.
That’s why investors should strongly consider uranium stocks to buy.
Cameco (CCJ)
Cameco’s (NYSE:CCJ) recent weakness is a strong buy opportunity.
Technically, it just caught support just below its 100-day moving average and has become oversold on RSI, MACD and Williams’ %R. From here, I expect CCJ to resume the bullish uptrend it’s enjoyed since March of last year. In fact, from its last traded price of $47.36, I’d like to see Cameco initially rally back to $55 in the near term.
In addition, with the uranium supply only getting tighter, we’d be foolish to ignore CCJ here. Making supply issues even worse, Kazakhstan, the world’s biggest uranium-producing country, increased its extraction taxes, which could limit supply growth, according to BMO Capital.
Helping analysts at Bank of America added Cameco to its US 1 List. With a buy rating, Goldman Sachs raised its price target to $56. And RBC Capital recently said they’d buy on weakness.
NexGen Energy (NXE)
NexGen Energy (NYSE:NXE) is also a buy on weakness.
After dropping from about $7.52 to $6.58, NXE appears to have caught strong triple-bottom support. It’s also over-extended on RSI, MACD and Williams’ %R and could also race higher.
As I noted on May 20, “The company is confident about the future of the uranium market,” adding, “NXE is reportedly in the final stages of permitting for the Rook I project and could start construction shortly.”
If that project is successful, it could be one of the largest in the world. Currently, the company is waiting for the Canadian government’s approval to proceed.
As noted by the company, “The proposed new underground mine and mill development is located in the uranium-rich district of the southwestern area of the Athabasca Basin; located in Saskatchewan – a premier mining jurisdiction.”
The potential success from just Canadian approval will be incredibly rewarding.
Global X Uranium ETF (URA)
Or, if you’d rather diversify at a low cost with 48 uranium-related stocks, there’s the Global X Uranium ETF (NYSEARCA:URA).
With an expense ratio of 0.69%, the ETF invests in companies “involved in uranium mining and the production of nuclear components, including those in extraction, refining, exploration, or manufacturing of equipment for the uranium and nuclear industries,” as noted by GlobalXETFs.com.
URA is also a buy on recent, temporary weakness. After all, the supply-demand situation will get even tighter with the Russia ban and artificial intelligence. The pullback in the ETF and related stocks is a gift. From its current price of $28.26, I’d like to see the URA ETF initially retest at $33 a share.
Some of its top holdings include Cameco, NexGen Energy, Paladin Energy (OTCMKTS:PALAF), Uranium Energy (NYSEAMERICAN:UEC) and Denison Mines (NYSEAMERICAN:DNN).
On the date of publication, Ian Cooper did not have (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
