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Why Shares of Uranium Energy, Cameco, and Energy Fuels Are Powering Higher Today
With the debt ceiling deal moving through congress, investors are charged up about the prospects of uranium stocks.
On a bullish day for markets -- the S&P 500 and Dow Jones Industrial Average are both up more than 0.3% -- uranium stocks are soaring. Besides the debt ceiling deal that seems on track to reach President Joe Biden's desk in the coming days, a new documentary film that espouses nuclear power is helping to propel uranium stocks higher.
As of 1:58 p.m. ET, shares of Uranium Energy (UEC 11.58%) are up 12.4%, while shares of Cameco (CCJ 8.84%) and Energy Fuels (UUUU 7.48%) have climbed 10.7% and 9.4%, respectively. Denison Mines (DNN 7.41%) is also riding higher, up 10.2%.
With the debt ceiling deal, otherwise known as the Fiscal Responsibility Act of 2023, clearing the House of Representatives yesterday, nuclear power-focused investors feel motivated to click the buy button on various uranium stocks. What's the connection? The Fiscal Responsibility Act maintains the provisions set forth in the Inflation Reduction Act -- something that Republicans had sought to repeal during the debt ceiling deal negotiations.
Providing billions of dollars in funding for electric vehicles, solar arrays, and wind farms, the Inflation Reduction Act also provides funding for nuclear power projects. The Department of Energy, for example, has $40 billion in loan funding available as well as $3.6 billion in credit subsidy for loan guarantees for clean energy projects, of which nuclear energy is included. In addition, the Inflation Reduction Act establishes a tax credit for electricity produced at qualified nuclear power facilities, and, if wage requirements are met for workers, there is a bonus credit that's 5 times the base credit available.
With assets located in North and South America, Uranium Energy is a well-diversified uranium company. It recently received an award from the U.S. Department of Energy to supply 300,000 pounds of triuranium octoxide to the Strategic Uranium Reserve. With a market capitalization over $12 billion, Cameco is the largest uranium stock available to investors based on market cap. Energy Fuels operates several high-grade uranium projects in the United States, and it's also focused on production of rare earth metals and vanadium.
Although it may not be as significant as the momentum that's building behind the debt ceiling deal, Oliver Stone's new documentary in support of the nuclear industry is also propelling uranium stocks higher. The filmmaker appeared on Joe Rogan's podcast, The Joe Rogan Experience, this week to discuss his new film, Nuclear Now, which explores the benefits of adopting nuclear energy to mitigate the effects of climate change. With an estimated 11 million listeners per episode, Rogan's podcast is the most popular podcast on Spotify.
Despite the strong feelings that both nuclear power advocates and critics espouse, it's clear that there's a groundswell of support among investors for the industry. With funding provisions from the Inflation Recovery Act still in place, there's a possibility that nuclear power may see an increase in interest; however, construction of these power plants won't happen overnight. And while Oliver Stone's new film may contribute to a change of heart among critics, it's unlikely to effect a tidal shift in sentiment.
For those who had pondered powering their portfolios with uranium stocks prior to today, there's not much that should convince them to click the buy button on uranium stocks today.