Cameco(NYSE: CCJ) stock's rally from last Friday extended into trading this morning, with shares of the uranium miner rallying 5.5% at its highest point during the day through noon Monday. The uranium stock was up almost 12% over two days as of this writing.
Latest developments have fueled hopes of a resurgence in the nuclear energy industry, and investors believe Cameco -- a significant producer of the nuclear fuel uranium -- could be the best stock to play a potential recovery in the uranium markets. They could be right.
The focus is back on nuclear energy
This morning, 14 of the world's banks and financial institutions pledged support for nuclear energy at an event in New York City. Specifically, the banks are backing the Declaration to Triple Nuclear Energy endorsed by more than 20 countries, including the U.S., at the COP28 summit last year to more than triple global nuclear energy capacity by 2050.
While it's not clear yet how banks will contribute, they could extend more funding to support the global nuclear energy industry. Nuclear reactors, used at nuclear power plants to generate energy, are expensive to build, and lenders often shy away from financing them given the complexities in the construction and operation of nuclear power reactors and plants.
Support from banks comes at a crucial time as nations across the globe are reconsidering nuclear energy's potential to help them address the climate change crisis. Just last week, utility giant Constellation Energy signed a 20-year power purchase contract with tech giant Microsoft. It later announced plans to restart a nuclear power plant shuttered since 1979 in Pennsylvania.
Cameco stock is a solid bet on nuclear and uranium
Since nuclear reactors run on uranium fuel, Constellation Energy's announcement sent uranium stocks flying last Friday. Today's fresh development drove shares of Cameco even higher, as Cameco (alongside Kazakhstan's Kazatomprom) is one of the world's largest uranium producers and has significant clout in the industry.
Although the uranium industry won't turn around overnight, demand for uranium should eventually rise as more nuclear reactors come online. Nearly 60 nuclear reactors are currently under construction and another 90 or so are planned globally, according to the World Nuclear Association's latest report. Any rise in the demand for and price of uranium should benefit Cameco, given its foothold in the industry and its financial flexibility.
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Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Constellation Energy and Microsoft. The Motley Fool recommends Cameco and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
