Weekly Market Recap (October 18) – AI, Nuclear Power, and Uranium: A Clear Investment Theme Emerges

2025 Uranium Market Outlook: Could Uranium Prices Hit Triple Digits?
Published on: Oct 18, 2024

For a long time, people have been extremely cautious about nuclear energy, let alone actively developing nuclear power. However, recent years have seen an interesting shift: a global nuclear power restart and a rare development opportunity for uranium mining. Recently, to meet the energy demands of artificial intelligence (AI) development, large American technology companies have been investing in nuclear power, marking the first time in nuclear power history that it has faced such urgent demand.

At the end of last month, Microsoft (MSFT) signed a clean electricity purchase agreement with the largest clean energy supplier in the United States, Constellation Energy (CEG), to restart the Three Mile Island nuclear power plant located in Pennsylvania. This week, Google, a subsidiary of Alphabet, announced a partnership with Kairos Power to build a series of small modular reactors (SMRs), with a total expected capacity of 500 megawatts. On Wednesday, Amazon also announced its investment in SMRs to meet the power needs of its data centers and AI operations.

The focus of tech giants on nuclear power has sparked investment enthusiasm, causing stock prices for nuclear power and uranium mining companies to surge.

In September 2024, Galen McNamara, the Interim CEO and Chairman of Aero Energy Ltd. (TSXV: AERO, OTC Pink: AAUGF), discussed the results of drilling activities and new discoveries at the Murmac Uranium Project in an interview with METALS 100. The company is focused on discovering high-grade uranium deposits in its flagship properties—Sun Dog, Strike, and Murmac—as well as its wholly owned sites. Aero Energy Ltd. has completed the summer drilling program at the Sun Dog Uranium Project near Uranium City in northwestern Saskatchewan.

Uranium, as the main fuel for nuclear power plants, is experiencing a bull market. The spot price of uranium accelerated its rise after 2021 and entered a “soaring” phase in 2023, becoming the best-performing energy commodity of the year. Besides demand driven by nuclear power, the supply side has also supported the price increase, such as the U.S. ban on Russian enriched uranium and geopolitical unrest disrupting or even interrupting this fuel’s supply chain.

Global natural uranium supply is concentrated in seven countries: Kazakhstan, Canada, Namibia, Australia, Uzbekistan, Russia, and Niger, which collectively produce 94% of the world’s total output. Notably, the uranium supply chain, like that of oil and natural gas, is susceptible to geopolitical factors. Russia accounts for 5% of global uranium production, but its enrichment capacity exceeds 40% globally. If Russia withdraws from the global nuclear fuel chain, it could potentially disrupt the market balance for uranium.

Some agencies predict that in 2024, global natural uranium supply is expected to increase by 10%, while demand will rise by 6%, leaving a supply-demand gap of about 12%. Therefore, the imbalance in the supply and demand of natural uranium is expected to continue, ushering in a new cycle of rising uranium prices.

AI Clean Energy Energy Metals Uranium