Why Energy Fuels Rocketed Higher Today

Shares of uranium and rare earths miner Energy Fuels (NYSEMKT: UUUU) rallied 13.8% on Tuesday.

Energy Fuels had multiple news items boosting sentiment today. First, the company announced record monthly uranium production from one of its operational mines in May. Second, Meta Platforms (NASDAQ: META) signed a 20-year nuclear agreement with Constellation Energy (NASDAQ: CEG) to power its AI data centers, lifting sentiment for future uranium demand.

Together, these items fueled a double-digit move in the stock.

Energy Fuels' biggest month ever

Energy Fuels announced another record month of production from the company's Pinyon Plain mine in Arizona, with nearly 260,000 pounds of uranium oxide produced in May. In addition, Energy Fuels also announced an increase to the in-ground uranium resources for its Bullfrog Project in Utah. Finally, the company noted it is advancing permits for two more projects in New Mexico and Arizona.

In addition to these production mines, where production appears to be growing smoothly, Energy Fuels owns the White Mesa mill, which is the only operational uranium mining processing facility in the U.S.

In addition, Meta Platforms announced a 20-year nuclear energy deal with Constellation today. The Meta-Constellation announcement lifted a lot of AI technology and nuclear stocks alike, so that probably played a strong role in Energy Fuels' rise. When combined with its unique processing asset as well as strong execution, at least in the recent month, it's no wonder the stock rallied today.

Image source: Getty Images.

Where do uranium prices go from here?

While this all seems incredibly bullish, investors also need to consider other factors, such as supply and demand dynamics. For instance, the company actually elected to cut back on a lot of uranium deliveries last quarter as the price of uranium had fallen, resulting in lower revenue and an operating loss in the first quarter. Mining companies can be difficult investments due to high fixed costs and volatile prices for the end product.

However, management withheld uranium sales on the belief uranium prices would rise a lot in the future, and today's twin announcements did seem to indicate management may be right.

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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Billy Duberstein and/or his clients have positions in Meta Platforms. The Motley Fool has positions in and recommends Constellation Energy and Meta Platforms. The Motley Fool has a disclosure policy.