The United States is prioritizing nuclear energy to meet rising demand, with plans to expand nuclear capacity from 100 gigawatts to 400 gigawatts by 2050. Energy demand is expected to surge in coming years, driven by artificial intelligence data centers and manufacturing electrification.
Under President Donald Trump and Department of Energy Secretary Chris Wright, the administration has set this target. The DOE recently announced a $2.7 billion investment to rebuild the domestic uranium enrichment industry.
This nuclear revival marks a shift from the previous decade, when nuclear power fell out of favor after the Fukushima meltdown. Many view nuclear power as crucial for meeting energy demands while reducing carbon emissions.
Cameco, a uranium-mining leader, could benefit from this opportunity. The company is the second-largest uranium producer globally, behind only Kazatomprom in Kazakhstan. Based in Canada, Cameco is a key provider to Western markets seeking to reduce dependence on Russian and Kazakh uranium.
The company has investments in high-grade uranium mines including McArthur River and Cigar Lake in Saskatchewan's Athabasca Basin. It also holds a 40% stake in the Inkai joint venture in Kazakhstan. Cameco primarily sells uranium under long-term contracts with price mechanisms to capture upside when prices rise.
Cameco has commitments to deliver about 28 million pounds annually from 2025 through 2029. Roughly 60% to 70% of its contracts are market-linked to spot uranium prices.
The company owns a 49% stake in Westinghouse, with Brookfield Renewable Partners owning the remainder. Westinghouse provides design and engineering services for about half of the world's operating nuclear plants.
Westinghouse's AP1000 is a Generation III+ reactor with fully passive safety systems and U.S. Nuclear Regulatory Commission certification. It uses standard Low-Enriched Uranium, for which infrastructure exists in the U.S. and among allies.
In October, Cameco, Brookfield, and Westinghouse entered an $80 billion agreement with the U.S. government to address energy demand and accelerate nuclear buildout. The parties aim to construct at least eight new reactors, including Westinghouse's AP1000 and its small modular reactor AP300.
Under this agreement, the U.S. government has a profit-sharing mechanism. Once active, the government is entitled to 20% of all cash distributions by Westinghouse exceeding a cumulative total of $17.5 billion.
Cameco stock trades at a forward price-to-earnings ratio of 72.4 times projected 2026 earnings. Analysts project earnings-per-share growth of 48% this year and another 33% in 2027.
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