Nuclear Stocks Rally on $2.7B US Push for Domestic Uranium Fuel
Centrus Energy shares surge after Department of Energy awards major contracts to cut reliance on Russian uranium and fuel next-generation reactors.
Shares of nuclear energy companies surged Tuesday after the U.S. Department of Energy announced a landmark $2.7 billion investment to revitalize the domestic uranium fuel supply chain, a decisive move aimed at reducing the nation’s dependence on foreign enrichment services.
Centrus Energy Corp. (NYSE: LEU), a direct beneficiary of the government initiative, saw its stock jump by more than 10%, climbing $27.91 to close at $300.41 in afternoon trading. The rally extended across the sector, with uranium producers, miners, and developers of next-generation reactors all finding investor favor on the news of the substantial government backing.
The federal funding is designed to address a critical vulnerability in the U.S. energy grid. While the nation is the world's largest consumer of nuclear power, it has limited domestic capacity to enrich uranium, the fuel for its fleet of reactors. This has led to a heavy reliance on foreign suppliers, including Russia. The Department of Energy initiative aims to re-shore this capability, particularly for producing high-assay low-enriched uranium (HALEU), which is required for many advanced reactor designs now under development.
Under the program, the DOE awarded three companies $900 million each to expand and build out the domestic enrichment pipeline. The primary contractors include American Centrifuge Operating, a subsidiary of Centrus Energy, which will focus on HALEU production. Orano Federal Services and General Matter were the other two major recipients selected to boost enrichment capacity. Additionally, Global Laser Enrichment, a joint venture involving Canadian uranium giant Cameco Corp. (NYSE: CCJ), received $28 million to advance next-generation laser enrichment technology.
The market reaction highlighted the significance of the government's commitment. Beyond the sharp rise in Centrus shares, the broader industry felt the positive impact. Shares of Cameco rose 1.27%, reflecting its role in the technology development side of the initiative. Uranium-focused exchange-traded funds, such as the Sprott Uranium Miners ETF, also experienced strong gains as investors priced in the long-term benefits of a secure domestic fuel supply for the entire sector.
This investment is seen as a foundational step for the next wave of nuclear technology, including small modular reactors (SMRs). These advanced reactors, which promise safer and more flexible power generation, are a key part of the U.S. strategy to provide reliable, carbon-free baseload power, a need that has become more acute with the surging energy demands of artificial intelligence and data centers.
For investors, the DOE's awards signal a clear and long-term policy commitment to nuclear power's role in the country's energy independence and clean energy goals. As Centrus Energy stated in its mission to rebuild America's nuclear supply chain, this funding provides the catalyst to turn strategic goals into operational reality, setting the stage for a potential renaissance in the U.S. nuclear industry.