Don't Be Afraid to Look Beyond AI: Why Nuclear Energy and Cameco Matter

Many investors find themselves increasingly hesitant when considering AI stocks at current valuations. The fear is understandable—parallels to the dot-com crash loom large, and billions flowing into AI have raised legitimate questions about short-term sustainability. Yet there’s a smarter way to participate in the AI boom while hedging against potential disappointment: the nuclear energy sector, where Canada’s Cameco offers compelling exposure.

Nuclear Power: The Overlooked Energy Engine for AI Growth

Here’s what most investors miss: AI’s explosive growth demands massive amounts of electricity. Every data center powering these systems requires reliable, abundant, low-carbon energy. While renewable sources like solar and wind receive headlines, nuclear power is increasingly recognized as the backbone of long-term energy infrastructure.

The U.S. government is making this bet official. The Department of Energy has set an ambitious goal to triple America’s nuclear capacity by 2050. Currently, nuclear generates only about 21% of America’s total electricity despite the country already operating 94 reactors—more than any other nation by volume. Beyond existing facilities, the government has pledged $80 billion to procure 10 new Westinghouse AP 1000 reactors. Globally, the picture is even more dramatic: 70 nuclear reactors are under construction with another 115 planned, according to industry tracking.

Every single one of these reactors requires uranium. The World Nuclear Association projects uranium demand will grow another 28% by 2030. This isn’t speculation—it’s infrastructure mathematics.

Cameco’s Strategic Position in the Global Uranium Supply Chain

Cameco (NYSE: CCJ) is the world’s second-largest uranium producer, commanding 17% of global uranium output in 2024. Only Kazakhstan’s state-run Kazatomprom produces more. This market position is further reinforced by geography: Cameco owns both the world’s highest-grade and largest high-grade uranium mines, both located in Canada.

Canadian uranium has become so strategically important to America’s energy independence that U.S. tariff policy explicitly protects it. While most Canadian goods face a 25% tariff, Canadian energy products including uranium are taxed at just 10%—a significant carve-out that shields Cameco’s margins.

The company’s supply chain advantage extends further. Cameco holds a 49% stake in Westinghouse, the manufacturer of those AP 1000 reactors the U.S. government is purchasing. This means Cameco profits across multiple layers of the nuclear ecosystem: fuel production, reactor manufacturing partnerships, and long-term supply contracts.

Double-Digit Growth: Cameco’s Financial Momentum

Despite a 15% revenue dip in Q3 2025, Cameco’s broader trajectory tells a different story. For the first nine months of 2025, the company posted 17% revenue growth with gross profits surging 31%. The net profit margin sits at a healthy 15.18%.

Over the past five years, Cameco has delivered a compound annual growth rate (CAGR) of 10.28%. That pace has accelerated dramatically—the past three years show a 24.18% CAGR. This isn’t gradual expansion; it’s a company hitting an inflection point as its addressable market expands.

The tailwinds are structural. With 70 reactors under construction and 115 more in planning stages worldwide, Cameco is positioned to supply uranium throughout this multi-decade buildout. The company can meet this demand: it already supplies 17% of the planet’s uranium annually.

Why Portfolio Diversification Into Nuclear Makes Sense

The conventional wisdom warns investors away from AI exposure at current valuations. But abandoning growth opportunities entirely is the other extreme. The smarter move is portfolio construction—capturing upside from transformational technologies while hedging against valuation risk through complementary sectors.

Nuclear energy is that hedge. It’s not speculative; it’s driven by concrete government policy, infrastructure investment, and the inescapable physics of energy demand. Cameco, as a primary beneficiary of these trends, offers investors a way to participate in the energy implications of AI without betting directly on AI stock multiples.

The company’s market position, favorable tariff treatment, diversified supply chain, and accelerating financial metrics create a compelling case. For investors afraid to chase AI stocks at current prices, this approach offers genuine alternative exposure with its own powerful long-term thesis.