Nuclear Stocks Cameco, Constellation Pull Back From Highs

Two of the biggest names in nuclear energy have fallen hard from their 52-week highs, and both have assets that look hard to replicate. Cameco (NYSE: CCJ) is down 31% from its peak. Constellation Energy (NASDAQ: CEG) is off 35%. The pullback comes as governments and large technology companies lean further into atomic power to meet rising electricity demand and carbon goals.

At COP28, the U.S., France, Japan, and the U.K. pledged to triple global nuclear capacity by 2050. The Department of Energy has moved to speed up permitting and commercial deployment of next-generation reactors. Major tech firms have signed long-term power purchase agreements with nuclear operators, a demand signal that has only grown louder.

Cameco: Uranium supply plus a Westinghouse IPO

Cameco operates in Saskatchewan's Athabasca Basin, home to the world's highest-grade uranium deposits. The company holds controlling stakes in McArthur River and Cigar Lake, with life-of-mine cash operating costs of $21.72 per pound at McArthur River and $23.94 at Cigar Lake. Those costs give it a structural margin advantage over most peers.

Most of Cameco's operations sit in North America, a geographic edge as Western buyers shift away from Russian uranium. The company is insulated from the political and regulatory risk that hangs over producers in Kazakhstan, Uzbekistan, and Niger.

Cameco also owns 49% of Westinghouse Electric, with Brookfield Renewable Partners holding the rest. Westinghouse's technology runs in half the world's operating reactors, and the U.S. DOE conditionally committed $17.5 billion in loans to finance up to 10 Westinghouse AP1000 reactors. On July 31, Westinghouse confidentially filed a draft S-1 with the SEC for an IPO. Cameco took on debt and equity to buy into Westinghouse, and the IPO gives it a chance to raise capital and pay that down while putting a public valuation on nuclear infrastructure demand.

The company has locked in commitments to deliver an average of 28 million pounds of uranium annually through 2030, revenue visibility most miners cannot match. For long-term investors, the stock at 31% below its high offers exposure to the industry's broader tailwinds.

Constellation: Powering the data center boom

Constellation is the largest nuclear power operator in the U.S., controlling 22 gigawatts of capacity across 14 generating stations and supplying roughly 10% of the country's carbon-free electricity. Its average nuclear capacity factor last year was 94.7%, best-in-class for the fleet. That efficiency means higher revenue per reactor and consistent delivery during peak summer and winter demand, when electricity prices spike.

That nuclear footprint has made Constellation a go-to counterparty for big tech. Microsoft, Meta Platforms, and Dallas-based data center operator CyrusOne have signed long-term power purchase agreements with the company. On June 23, Walmart also signed a PPA, one of the first by a major U.S. retailer.

The company is pursuing upgrades to its existing fleet to squeeze out additional capacity, aiming to add about 1.5 GW of clean power by 2035. That includes the 835-megawatt Crane Clean Energy Center, the former Three Mile Island Unit 1. Constellation also recently invested in Blue Energy, its first bet on a U.S. developer of small modular reactors.

At 22.7 times projected 2026 earnings, the stock is not cheap. Analysts expect EPS growth of 13% in 2027 and nearly 29% in 2028, reflecting the demand pull from data centers and electrification.

CCJ carries an Alpha Score of 53/100, rated Mixed, reflecting the pullback and uncertainty around uranium prices. Constellation is not rated in this dataset.

Disclosure: Courtney Carlsen has positions in Cameco, Constellation Energy, Meta Platforms, and Microsoft. The Motley Fool has positions in and recommends Cameco, Constellation Energy, Meta Platforms, Microsoft, and Walmart. The Motley Fool recommends Brookfield Renewable.