Big moves in the last 24 hours across the global Uranium stocks, with Cameco down an aggregate of ~13% across the two sessions (with a slight recovery overnight). By now, we’ve all read extensively about DeepSeek-R1, which uses more efficient algorithms to achieve the same results as the OpenAI model, implying AI computing can be less energy-intensive than first thought. Given that big tech turned their attention to nuclear power at the back end of last year to support energy-intensive AI, it makes sense that Uranium stocks were sold off on this news, albeit with little data to back things up, i.e., sell first, ask questions later.
- This morning, we refocused attention on the reasons we remain bullish on Uranium despite the recent hit to sentiment.
The sector remains very volatile, but in our view the underlying trends are unchanged. Nuclear energy is back globally with most developed economies looking to increase nuclear power generation to meet growing energy needs whilst decarbonising electricity. Renewables alone won’t be the solution. Data centres need always-on, baseload power. The current global reactor fleet of ~450 reactors consumes about 180Mlb of uranium annually, but the current mine supply is only about 140Mlb.
The deficit is being made up from inventories and secondary supply. That is not inexhaustible, and new uranium mines will be required to maintain existing fuel requirements, let alone new growth. We expect to see uranium prices trading above US$100/lb this cycle, and therefore, sell-offs like yesterday are, we believe, buying opportunities, not a time to panic and sell.
MM remains bullish CCJ US & other Uranium stocks into this weakness
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