Cameco Poised to Benefit from Nuclear Power Surge

The tech industry's massive investment in artificial intelligence (AI) infrastructure has led to increased demand for power, and companies like Google, Amazon, and Meta are ramping up their capital expenditure budgets. While some might view this as a long-term opportunity for companies like Nvidia, which provides the majority of processors used in AI data centers, there is another player that could benefit: Cameco.

Cameco, a major uranium miner and refiner based in Saskatchewan, Canada, has been quietly building its presence in the nuclear power industry. The company owns 49% of Westinghouse Electric, which makes and services nuclear reactors worldwide. Last year, Cameco turned revenue of $3.5 billion into adjusted net earnings of $627 million.

The World Nuclear Association predicts that global nuclear power capacity could easily double between now and 2050, with some projections suggesting it could triple during this time. Goldman Sachs predicts the current count of about 440 reactors could reach 500 as soon as 2030. Almost all of these new facilities will be powered by uranium-235, which starts its journey at one of Cameco's mines.

While AI data centers need power now, nuclear power is a long-term solution that achieves or exceeds cost parity with alternatives. Many existing nuclear reactors are still functioning well beyond their initial estimates, and new designs could have even longer lifespans. Technology companies and public utilities are also evolving to cultivate true partnerships, such as Microsoft's plan to restart an idle reactor at Three Mile Island to power one of its data centers.