Invest in Cameco to buy in to the nuclear renaissance
Nuclear industry supplier Cameco is well placed to benefit from the rise in demand for zero-carbon power
Cameco (Toronto: CCO, or NYSE: CCJ) is a C$54 billion (£28.8 billion) nuclear-industry supplier covering the whole spectrum from uranium exploration, mining, refining, enrichment and fuel fabrication to designing, developing and servicing reactors.
The Iran war and resulting interruption of oil and gas supplies shows how geopolitical tensions can disrupt supply chains and affect share prices. Markets would drop precipitately should China invade Taiwan or Russia attack the Baltic states. Given these uncertainties, there is a strong case for investing in secure, reliable, zero-carbon baseload power. The construction of data centres for AI is also adding to demand for such power.
The renaissance in nuclear for zero-carbon baseload electricity meets these needs. There are already 436 nuclear reactors in the world with 70 new reactors under construction and another 115 planned. And 38 countries have signed a declaration to triple nuclear generating capacity by 2050.
Try 6 free issues of MoneyWeek today
Get unparalleled financial insight, analysis and expert opinion you can profit from.
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Cameco's reserves of uranium are in Canada, Australia, the US and Kazakhstan, with the majority of its proven and probable reserves in Canada. In 2025, Cameco was the second-largest producer with 15% (Kazatomprom was the largest at 20%). Planned production is expected to fall below demand in 2033 and be only 50% of demand by 2041. Cameco's strategy is to build a portfolio of long-term supply contracts with utilities rather than to rely on the spot market. Current contracts run into the 2030s.
Cameco also has a 49% interest in Global Laser Enrichment (GLE) (and the option to attain 75% ownership); GLE has a worldwide exclusive licence on separation of isotopes by laser excitation (SILEX) – a third-generation enrichment technology.
Cameco's reactor design, development, construction and servicing activities are provided by Westinghouse Electric Company, which is a Cameco/ Brookfield Asset Management strategic partnership, with Cameco holding a 49% stake.
Cameco's four drivers of growth
Four factors are expected to drive growth. Firstly, the expected shortfall of supply from 2030-2031 onwards (rapidly increasing the shortfall from 2033), which will lead to stronger pricing and enable the firm to raise production from its reserves. Uranium prices are already rising. Cameco's fuel-manufacturing division enables it to capture more of the value added than it would as a miner.
Secondly, there's the growing global fleet of nuclear reactors that Westinghouse inspects, services and provides for. The third factor is the 185 new reactors planned or under construction. Westinghouse already has six of its AP1000 reactors in operation, another 30 under construction and 16 planned. The fourth is the potential of SILEX technology for the re-enrichment of depleted uranium and for making low-enriched fuel for future light-water reactors.
Cameco's 2025 results to the end of December showed revenue up 11% to $3.5 billion, adjusted EBITDA up 26% to C$1.93 billion and adjusted diluted earnings per share up 321% to C$1.44. First-quarter results show revenue up 7% and adjusted earnings per share up by more than 100% to $0.47. It says committed sales volumes for 2026 are 29 million pounds (mlbs) to 32mlbs of uranium compared to 33mlbs in 2025. But prices are rising, with an average price in the fourth quarter of 2025 of C$91.3 per pound compared with C$80.9 for same period in 2024. Long-term contract prices in 2026 are around C$131 and 2033 prices are anticipated to be in a range with a ceiling of C$200.
Cameco focuses on securing long-term contracts that anticipate increasing demand and shortfall of supply rather than serving the spot market. For example, in March 2026 Cameco signed a nine-year agreement with India to supply nearly 22 million pounds of uranium ore at market prices. This contract has an estimated value of C$2.6 billion.
Cameco's share price is on the rise
Cameco enjoys stability thanks to long-term contracts and growth potential in all divisions. With respect to the mining of uranium, it has large reserves in stable countries, most being in Canada. The fuel services division refines, converts and manufactures fuels, and benefits from the increasing demand for nuclear reactors to provide zero-carbon baseload electricity.
Cameco’s interest in GLE’s third-generation laser-enrichment technology and its option to take majority ownership provides an extra growth driver for this division. Then there is its 49% stake in Westinghouse (WH), which has the proven AP1000 and AP300 reactors, 30 more under construction and others planned. Westinghouse is also developing small modular reactors.
In October 2025, WH signed an agreement whereby the US government will facilitate the financing and building of new reactors in the US to the value of at least $80 billion to power AI-heavy data centres. This raises the prospect of a separate initial public offering (IPO) for WH that could value it at $15 billion-$35 billion or more (compared with the $8.2 billion Cameco/ Brookfield paid for it in 2023) and yield a capital gain. The UK government sold to Toshiba in 2006 for only $5.4 billion.
Cameco’s recent share price is C$123, with a one-year target of C$185, a forward yield of 0.19% and a strong balance sheet with net cash of C$0.2 billion. The forward price-earnings ratio is 46 for 2027 falling to 36.3 for 2028 and, over one year, the shares are up 13.6%. It is vertically integrated (mining to reactor construction and maintenance) and will be a key supplier in the renaissance of clean, reliable nuclear power. The rising price of uranium and new reactors planned globally suggest a long-term rising share price, with the possibility of a capital return from a Westinghouse initial public offering.
This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.
