Uranium price explodes to over 100 USD – should you buy now?

Last Updated: 16. Januar 2024By

Uranium price knows no limits: On Friday, it crossed the $100 per pound mark for the first time since 2007. This means it has more than doubled in the last 12 months.

Is this the end of the road?

As always on the stock market, we have to differentiate between short and long-term perspectives.

Short-term: volatile – long-term: intact upward trend In the short term, it is possible that there will be fluctuations and a cooling off period after such a steep increase.

However, in the long term, I expect the upward trend to continue, as the prospects for uranium are still excellent: At the end of October, the largest Western uranium producer Cameco announced that the industry is currently experiencing the best market conditions ever.

In December 2023, an atomic alliance of 22 leading countries was founded at the climate conference in Dubai. Except for Germany, all major industrialized nations see nuclear energy as a sensible CO2-neutral alternative.

The alliance aims to triple nuclear energy by 2050 – a real megatrend. But we don’t have to wait that long: According to the International Atomic Energy Agency (IAEA), there are currently 59 new reactors under construction worldwide and over 100 in planning.

More production and higher prices possible This rapid increase has two advantages for uranium producers:

On the one hand, they can generate more revenue simply by expanding their capacities.

On the other hand, the unbridled demand for uranium leads to the aforementioned price increases, allowing the produced uranium to be sold at a higher price.

For the large producers, this effect only gradually comes into play: They usually enter into long-term supply contracts with power plant operators, so the rising price does not immediately affect their revenue by 100%.

However, new contracts can be concluded under significantly better conditions.

How to invest as a small investor If you want to invest in uranium as a small investor, uranium producers are the easiest option. There is a colorful selection of very small to very large companies, with the smaller ones being mostly very speculative.

We are following Cameco both as a stock and with a discounted option certificate.

The stock is currently at +63% in the sample portfolio, and the option certificate is relatively new in the portfolio and was already at +29% just two days after purchase.

Is it worth getting in now? Definitely, due to the long-term perspectives.

However, be aware that the uranium price and uranium stocks can be very volatile in the meantime. So don’t get nervous if there are significant drops in between.