Another week, another deal done by a major tech company to buy power from a nuclear energy producer.
It’s been another good week for the nuclear energy sector, and one of the best pure-play stocks, Cameco (CCJ 1.60%), enjoyed a 10.4% rise in the week to Friday morning. The latest news is Alphabet‘s Google signing a deal to purchase nuclear-powered energy from Kairos Power. The latter is developing small modular reactors (SMRs), with the first SMR scheduled to come online by 2030.
Cameco is the pick of the picks-and-shovels stocks
Investor attention has naturally focused on companies with nuclear-generating capabilities like Constellation Energy and Vistra. Indeed, the former signed a 20-year deal to supply power to Microsoft and will restart the Three Mile Island nuclear power plant.
Alongside power generators and utilities, investors can also buy stock in companies that support nuclear power generation. Cameco operates in three segments, and it is one of the best stocks to invest in if you want to play the nuclear theme.
Cameco’s business segments include uranium production capacity (it has three large operations, two in Saskatchewan and one in Kazakhstan), a uranium fuel services business (supplying, refining, converting, and manufacturing nuclear fuel), and a 49% interest in operating plant services company Westinghouse.
A changing environment
The deals signed by major tech companies highlight a change in perception of the clean energy revolution. While the movement toward renewable energy continues, there’s a growing recognition that it will likely be slower than expected. Nuclear power has a crucial role in providing safe, clean, and carbon-free power, not least because renewable energy is always likely to be an intermittent energy source.
Image source: Getty Images.
As such, the market is moving toward nuclear energy, and Cameco’s position as a commercial supplier (Cameco estimates that 80% of primary uranium production is state-owned) makes it ideally placed to service growing private sector demand.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, 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.
