Uranium Energy: Set To Capitalize On Google's Nuclear Shift

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Uranium Energy: Set To Capitalize On Google's Nuclear Shift

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Uranium Energy is the best uranium miner to back, with no debt, significant inventory, and operational readiness, poised for substantial growth.Google's commitment to small modular reactors ...

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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nUranium Energy: Set To Capitalize On Google's Nuclear Shift\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-10-15 17:40 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4726795-uranium-energy-capitalize-googles-nuclear-shift><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Uranium Energy is the best uranium miner to back, with no debt, significant inventory, and operational readiness, poised for substantial growth.Google's commitment to small modular reactors ...</p>\n\n<a href=\"https://seekingalpha.com/article/4726795-uranium-energy-capitalize-googles-nuclear-shift\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BK4156","symbol_name":"煤与消费用燃料","start_time":0,"source_url":"https://seekingalpha.com/article/4726795-uranium-energy-capitalize-googles-nuclear-shift","article_id":"2475257464","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1494104649/image_1494104649.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2475257464","pubTimestamp":1728985226,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"Author's work on UEC And from my perspective, UEC hasn't even started to price in the slew of positive developments. The Latest Big Development Google said it will purchase power generated by several reactors to be built by nuclear energy startup Kairos Power , targeting the addition of 500 MW of nuclear power starting at the end of the decade. This is a completely different path from Microsoft  signing up with Constellation Energy , since Google's route seeks to use new technology, rather than a snowballed nuclear reactor. More specifically, using Small Modular Reactors  means smaller sizes, often the size of a shipping container and their modular design reduces construction timelines. Small modular reactors typically use the same type of fuel as traditional nuclear reactors: uranium. My point is this, whether it is Amazon  partnering up with Talen Energy , or CEG's nuclear reactors, or Google backing SMR technology, all these hyperscalers are chasing the same scarce commodity, uraniu","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4156":"煤与消费用燃料","UEC":"Uranium Energy Corp"},"translate_title":"铀能源：将利用谷歌的核转变","themeId":"2e34dea1f251c64471795be34b6fbaeb","isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"UEC":0.9},"content_text":"Uranium Energy is the best uranium miner to back, with no debt, significant inventory, and operational readiness, poised for substantial growth.Google's commitment to small modular reactors underscores the rising demand for uranium, benefiting UEC's unhedged position and strategic uranium purchases.UEC's recent resumption of uranium extraction in Wyoming and expansion of its processing plant highlight its operational leverage and preparedness.The increasing need for reliable, carbon-free energy from tech giants like Google and Microsoft positions UEC for significant upside as uranium prices rise.   Vertigo3d Investment Thesis Uranium Energy Corp. (NYSE:UEC) reported its fiscal Q4 2024 earnings results amid little fanfare, with no coverage on SA. That was on the surface, but in reality, this story is now charged and primed to go higher. The main takeaway here is this, UEC is the best uranium miner to back. Here, I highlight its fiscal Q4 2024 earnings results, as well as its most recent Google (GOOG) news development, and why investing now in UEC offers investors the best risk-reward it has been for a long time. I first recommended UEC to you at $7 per share. That was 2 and a half years ago. Clearly, this has been a horrible recommendation. Just horrible. But to have confidence to remain a die-hard UEC bull, in spite of these two years of UEC dragging my portfolio's performance down, just goes to show that I've reflected on its underlying prospects and believe the upside potential is now very, very close. Simply put, we are just waiting on one catalyst, and that catalyst is starting to surface. Price target: $17 per share (no time frame provided) Rapid Recap Before UEC's earnings results came out, I said: Author's work on UEC Unbeknownst to me, Google's contracts were being signed in the background!   Author's work on UEC And from my perspective, UEC hasn't even started to price in the slew of positive developments. The Latest Big Development Google said it will purchase power generated by several reactors to be built by nuclear energy startup Kairos Power (PRIVATE), targeting the addition of 500 MW of nuclear power starting at the end of the decade. This is a completely different path from Microsoft (MSFT) signing up with Constellation Energy (CEG), since Google's route seeks to use new technology, rather than a snowballed nuclear reactor. More specifically, using Small Modular Reactors (\"SMRs\") means smaller sizes, often the size of a shipping container and their modular design reduces construction timelines. Small modular reactors typically use the same type of fuel as traditional nuclear reactors: uranium. My point is this, whether it is Amazon (AMZN) partnering up with Talen Energy (TLN), or CEG's nuclear reactors, or Google backing SMR technology, all these hyperscalers are chasing the same scarce commodity, uranium. With this context in mind, allow me to explain why I believe that UEC is perhaps the best company to back in this space. Even though I'll readily admit that the tide will lift all boats, and exposure to any name in this space, is very likely to perform well. Uranium Energy's Bull Thesis in a Nutshell  No debt Inventory alone makes up 6% of its market cap 6% of market cap made up of cash; after paying $175 million for Rio Tinto's Wyoming assets Unhedged to uranium prices  UEC's fiscal Q4 results show yet another quarter with no uranium sales. These results reflect UEC's strategic decision to prioritize operational readiness and expansion activities, along with the absence of uranium sales during the year. From my perspective, this is incredibly bullish. Management has sought to be a net buyer of uranium during the past 12 months, and will be taking deliveries of an additional 700,000 pounds of uranium at an average cost of $38.20 per pound through December 2025. The more UEC can keep hold of its uranium pounds in the short term, the better. Because those pounds are going to soon become incredibly valuable. And now, let's get to the main thesis driver. On the operational front, UEC resumed uranium extraction at its Christensen Ranch ISR Mine in Wyoming. Production activities restarted in August 2024, funded by existing cash on the balance sheet, and the extracted uranium will be processed at the company's Irigaray Central Processing Plant. The Irigaray CPP, which serves as the hub for four fully permitted ISR projects in Wyoming’s Powder River Basin, is currently undergoing an expansion to increase its licensed capacity from 2.5 million pounds to 4.0 million pounds of U3O8 per year. To support this restart, UEC completed extensive preparations, including equipment reinstallation, electrical upgrades, and hiring of additional operational staff. UEC FQ4 2024 presentation Since I've been recommending UEC to you, it has felt like forever waiting for its Wyoming production to start. And that moment has now arrived. That's the background, next let's discuss the main driver. Uranium Price: The Only Catalyst That's Left Throughout most of 2024 the uranium price was moving lower and lower. But I now believe that this selling of uranium will slow down. Here's why. Trading economics In the graphic that follows, you see the biggest demand drivers for electricity. The Three Mile Island Unit 1 restart to support Microsoft's AI data center expansion is just one hyperscaler to hit the media in the past few weeks. UEC Presentation And how many more will surface in the next several months? The key drivers of nuclear demand include the increasing need for cheap, reliable, carbon-free energy to support the growing power requirements of data centers, which are expanding rapidly due to the AI and cloud computing boom. Major tech companies like Microsoft are seeking stable power sources to meet their climate commitments, as data centers' share of U.S. electricity consumption is projected to double by 2030. Additionally, nuclear power is gaining renewed attention as a means to enhance grid reliability amidst the ongoing retirement of coal and older nuclear plants, as well as to limit greenhouse gas emissions in line with policy goals. But Why UEC? Many people have asked me why only UEC. Surely, you can invest in other uranium players too? My thinking is this. I don't want all my eggs tied up to this uranium thesis. I already own and recommend Centrus Energy (LEU). Centrus Energy benefits from this increase in SMRs too, since Centrus Energy specializes in providing enriched uranium, which is a key fuel for nuclear reactors, including SMRs. And yet, having too much emotion tied to one idea is the reason why most investors struggle. I need the portfolio to survive. UEC is fully unhedged. Also, UEC operates debt free. And the business has tremendous operating leverage. Here's an illustration:  If the cost of production is $11 and its revenue is $10, the operation incurs a $1 loss. If revenue increases to $12, a 20% rise, the operation becomes profitable. If revenue rises to $13, a 30% increase, the profit margin jumps to $2, representing a 100% increase in profit from a small revenue increase.  An unhedged business with no debt, like UEC, benefits significantly from such leverage, offering a substantial margin of safety. But Isn't the Problem With the Thesis About the Supply Side? (Risk Factors) I believe that ramping up uranium supply is challenging due to the limited number of viable mining operations globally. However, there's always a price at which uranium miners can rapidly come online. On the other hand, establishing new mines is a complex, capital-intensive process that requires extensive permitting, regulatory approvals, and significant upfront investment. Recall, many existing uranium mines are either operating at reduced capacity or have been shuttered in recent years due to low prices, leaving only a handful of producers capable of quickly responding to increased demand. UEC has survived more than 10 years of bear market. You can't do that if you have any debt or are not an extremely astute management team. Additionally, restarting or expanding these operations is not straightforward, as it involves long lead times and requires addressing logistical, environmental, and workforce constraints. This makes it difficult for the uranium supply chain to adapt quickly to rising AI and cloud center demand. The Bottom Line Google's latest development, signing contracts to source power from small modular reactors, highlights the growing demand for reliable and scalable nuclear energy solutions. With SMRs using uranium as a fuel source, this adds to the already rising interest in uranium. For Uranium Energy, this is a significant boost, as the increasing adoption of nuclear power by tech giants like Google underscores the value of uranium in the energy transition. Given UEC’s unhedged position and readiness to capitalize on rising uranium prices, I believe the company is well-positioned for substantial growth in the coming years.  Price target: $17 per share (no time frame provided).","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"analysis","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"hasMoreComments":false,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false}}