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Uranium, green energy of the future, sees surging demand. Uranium stocks poised for further growth

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Jessica Amir wrote a column · Apr 8 04:00
Uranium and uranium stocks are looking increasingly attractive as demand rises for clean and cheap energy. Add in the AI and data centre demand...and supply cannot keep up.
Why am I talking about uranium? Uranium stocks are looking increasingly bullish as we have now entered an upgrade cycle for the uranium sector, and companies; with banks, and ratings agencies upgrading the future clean energy source.
Who's upgraded the sector? Moody's, Goldman Sachs, Fidelity, and S&P Global Market Intelligence all recently upgraded the sector, as supply issues remain, yet demand for clean energy is rising, amid the AI and data centre boom which is somewhat demanding access to low-cost energy round-the-clock. This comes at a time when the uranium price has pulled back from its record and supply issues are likely to remain till 2040, which supports upside in the sector.
We know supply has been taken out of the market, by Kazatomprom, the world’s biggest uranium miner, who cut production guidance this year amid poor weather in Kazakhstan, where most of the world's nuclear fuel is produced.
What are the tailwinds for the nuclear energy generators? The US has introduced tax incentives for nuclear power generation. And demand is rising from householders and businesses for clean energy. S&P Global Market Intelligence' report suggests that AI and data centres demand is driving an insatiable appetite for lost cost energy many hyper scale large cloud service providers are offering computing and storage services at a massive scale and heavily rely on data centres as part of their core business.
Also keep in mind, the US, and Canada and Japan want to use nuclear power as their main energy source by 2050, as it' one of the cleanest forms of energy and requires fewer natural resources than other available forms.
“The upside is set to come from both spiking power prices and long-term contracts to supply datacenters backed by generation asset colocation, according to industry analysts”
Meanwhile, Goldman Sachs upgraded the sector with also noting that supply remains constrained as the US fails to lift production, while the US considers a ban on Russian supplies. Many countries are focused on making nuclear power as their clean energy source by 2050, to cut emissions. Goldman analyst Neil Mehta says global uranium demand could grow by 60% by 2040.
Uranium stocks to watch? In case you have been sleeping under a rock, independent clean energy producers have been producing better shareholder returns than other energy providers. For example, Vistra Corp $VISTRA CORP C/WTS 02/02/2024 (TO PUR COM) (VST.WSA.US)$ +95% YTD, Constellation Energy $Constellation Energy (CEG.US)$ +65% YTD and NRG Energy $NRG Energy (NRG.US)$ (+41%)_
Also note, that Constellation Energy (CEG), has been the most upgraded stock over the last month, out of all the stocks in the S&P500 (bar one, Micron Technology). Constellation produced about 10% of all carbon-free energy on the US grid last year. 9% of its total generation comes from clean sources. Moody's also upgraded Constellation Energy as it is extending the lifespan of its nuclear fleet by 20 years\, which will create more additional carbon-free energy than all the solar and wind energy on the grid today.
Uranium, green energy of the future, sees surging demand. Uranium stocks poised for further growth
It's also worth watching Australia’s biggest uranium producer, Paladin Energy ( $Paladin Energy Ltd (PDN.AU)$ ) which is one of this year's best performers on the ASX, up 53%. It's also worth watching Uranium ETFs like URA $Global X Uranium ETF (URA.US)$, which is the most bought Uranium ETF. Also, watch URNM $BetaShares Global Uranium ETF (URNM.AU)$.
Uranium, green energy of the future, sees surging demand. Uranium stocks poised for further growth
For more, on nuclear power, read the World Nuclear Association's webpage.
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only. Read more
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