Cameco's $80 Billion U.S. Nuclear Deal Changes Everything

Shares of Cameco (NYSE: CCJ) ignited at the end of October, stunning the market with a single-day surge of over 23% to an all-time high of $110.16. This move capped an already stellar year in which the stock has climbed over 100%.

The catalyst was not a typical earnings beat or a commodity price spike; it was a foundational shift in U.S. energy policy. Trading volume exploded to 24.68 million shares (more than five times the daily average) as a wave of investor conviction signaled this was no ordinary event.

Cameco, alongside partner Brookfield Asset Management (NYSE: BAM), announced a transformational partnership with the U.S. government to facilitate an $80 billion build-out of new Westinghouse nuclear reactors. This move powerfully endorses the nuclear sector for investors and fundamentally reshapes Cameco's long-term value proposition.

AI's Thirst Meets a Global Quest for Energy Security

The partnership is a direct response to two powerful and converging global forces: the unstoppable energy demand of artificial intelligence (AI) and an urgent geopolitical need for energy security.

The rise of AI has created an unprecedented thirst for electricity. Data centers, the backbone of this technological revolution, require immense, continuous power. According to the International Energy Agency, global electricity consumption from data centers could more than double by 2030. This demand profile requires 24/7 baseload energy that intermittent renewables like solar and wind cannot provide on their own. Nuclear is emerging as the only carbon-free source capable of reliably meeting this need.

Simultaneously, geopolitical instability has forced Western nations to re-evaluate their energy supply chains, seeking to reduce dependence on unreliable foreign sources. This has made energy independence and security a top priority. 

Historically, the biggest obstacle to building new nuclear plants has been the colossal upfront cost and financial risk. This is where the government's involvement becomes a game-changer. This partnership will see the U.S. government arrange financing and facilitate permitting, likely utilizing the Department of Energy's Loan Programs Office. The government significantly de-risks these multi-billion dollar projects by providing loan guarantees, unlocking the private capital necessary to move from planning to construction.

How Cameco Built the Perfect Nuclear Play

While the rising tide of nuclear enthusiasm lifts many boats, the U.S. partnership specifically validates Cameco's unique business strategy, setting it apart from pure-play uranium miners. The deal is the ultimate payoff for the company's strategic 2023 acquisition of a 49% stake in Westinghouse Electric, a global leader in reactor technology. This move, once seen as a diversification play, is now revealed as a masterstroke of vertical integration.

This positions Cameco to benefit from a powerful dual-stream growth engine:

• Direct Fuel Demand: As new Westinghouse reactors are built, they will create a massive, locked-in demand stream for nuclear fuel. This directly benefits Cameco's core business of mining uranium and providing essential conversion services, creating a predictable, long-term revenue pipeline.
• Equity Earnings Growth: Beyond selling the fuel, Cameco will profit from the construction itself. The power of this combination is already visible in the company's financials. For the first six months of 2025, Cameco's share of Westinghouse's adjusted earnings before interest, taxes, depreciation and amortization was $445 million, a more than 100% increase from the prior year, driven by Westinghouse's involvement in another new reactor project. This latest U.S. deal is set to multiply that effect.

This integrated model makes Cameco a comprehensive investment vehicle for the entire nuclear value chain. The company is no longer just a commodity producer but a key partner in building the infrastructure that will drive its future demand.

Is Cameco Still a Buy?

After such a dramatic run-up, investors are rightfully asking if the opportunity has passed. Cameco's stock now trades at a high price-to-earnings ratio (P/E) of over 120, reflecting the market's lofty new expectations. While its price-to-book ratio of 10.02 is also elevated, these metrics must be viewed in the context of a company whose long-term earnings profile has been fundamentally transformed.

Wall Street sentiment remains overwhelmingly bullish. Of the 16 analysts covering the stock, 15 rate it a Buy. More telling are the price target revisions issued after the announcement, with several firms raising their targets to the $110-$130 range, signaling that institutional models are adjusting to this new reality.

A healthy financial foundation supports Cameco’s ability to execute on this growth. The company maintains a strong balance sheet, with a low debt-to-equity ratio of 0.15, providing stability and flexibility for long-term projects. This discipline, combined with strong operational performance, evidenced by its Q2 2025 earnings beat (51 cents reported earnings per share (EPS) vs. consensus of 29 cents), underscores its credibility as a reliable partner.

For those watching the stock, the next key catalyst is just around the corner. The company is scheduled to report its Q3 2025 earnings on Nov. 5, with consensus EPS estimates around 24 cents. This will be the first opportunity for investors to hear management provide detailed commentary on the partnership's expected timeline and financial impact. The $80 billion U.S. deal is a watershed moment, cementing nuclear power's role in the global energy transition. For Cameco, it validates a forward-thinking strategy and solidifies its standing as a central player in a new nuclear era.

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