Where to Begin With Uranium Stocks in 2023
Key takeaways
- Uranium stocks are getting renewed attention as price of the radioactive material has increased
- Mixed performance for stocks so far — Cameco is up 19% but BHP is down 5%
- ETFs tracking uranium are another option for savvy investors
As the world looks to go greener and the Russian offensive against Ukraine wages on, the uranium stock market looks different in 2023 than just a few years ago. With more countries looking to boost their nuclear power, it’s become a material of note for investors. We’ve got the lowdown on how the uranium market is shaping up this year and who the key companies are.
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The uranium stock market
So why has uranium become so in vogue of late? A few factors are creating a perfect market for the radioactive material used to power nuclear energy plants.
First off, more countries are looking for an alternative to expensive fossil fuel gas to hit their clean energy targets. The International Atomic Energy Agency predicts we’ll see a 120% increase in nuclear electricity levels by 2050.
Not to mention, Russia controls many of the world’s natural resources. The Russian-Ukraine conflict has jeopardized access to natural gas thanks to Russia’s sanctions, so countries need other options to keep the lights on. But Russia also controlled 40% of the world’s uranium supply before the invasion.
Because of this supply and demand, the price of uranium has risen this year. It’s currently trading at around a $53 average; if there’s a deficit, this price could climb much higher very quickly. The possibility has piqued investor interest.
The key players
Cameco is one of the leading global uranium suppliers. Based in Canada and with a 50% stake in the uranium-rich Cigar Lake, its share price has climbed over 19% in 2023.
Another major player is BHP, whose Olympic Dam mine in Australia is one of the largest uranium mines in the world (also mining copper, gold and silver there). BHP’s stock is down 5% this year thanks to poor earnings reports, but some analysts think the company is at the beginning of a bull run.
An exchange-traded fund might be your best bet for exposure to a basket of assets. The Global X Uranium ETF tracks uranium mining companies and nuclear component production, while the Sprott Uranium Miners ETF invests in the North Shore Global Uranium Mining Index securities.
The bottom line
As other raw materials are becoming hot commodities in the race towards making the planet more eco-friendly, uranium hasn’t been left out of the pack. It’s now viewed as a viable contender for many countries’ decarbonization plans.
That makes it a potential investing gem this decade as traders keep a close eye on uranium prices and whether an otherwise-quiet market has finally had some new life breathed into it.
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