Shares of ASX-listed Paladin Energy (AU:PDN) soared nearly 10% as of writing, in reaction to an announcement made by Amazon (AMZN) that could boost the uranium demand. Amazon is the latest tech company to invest in nuclear energy and sees this as a huge opportunity to meet the increasing power needs of its data centers. This signals positive prospects for uranium demand in the coming years.
Don't Miss our Black Friday Offers:
- Unlock your investing potential with TipRanks Premium - Now At 40% OFF!
- Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter
The announcement has also boosted other uranium stocks on the ASX. Australia’s Bannerman Energy (AU:BMN) surged 8%, Lotus Resources (AU:LOT) was up 10%, while Boss Energy (AU:BOE) gained 6% as of writing.
Amazon Fuels Uranium Surge with Nuclear Push
Amazon’s cloud computing arm, Amazon Web Services (AWS), is committing over $500 million to nuclear energy, unveiling projects across multiple states in the U.S. Recently, AWS has signed a partnership with Virginia-based Dominion Energy to explore building a small modular nuclear reactor.
Amazon’s push towards nuclear comes as it faces a growing demand for clean energy, driven by generative AI (artificial intelligence) expansion. This move also aligns with Amazon’s broader goal of achieving net-zero carbon emissions.
Amazon isn’t alone in exploring nuclear energy for its power needs. Several other tech firms are also adopting it to fuel their AI ambitions. Earlier, Alphabet, Google’s (GOOG) parent company, revealed its intentions to utilize small modular nuclear reactors for future energy requirements. Meanwhile, Microsoft (MSFT) has proposed an ambitious proposal to reactivate a defunct nuclear reactor at Three Mile Island in Pennsylvania to support its AI initiatives.
Nuclear power plants rely on a specific type of uranium, suggesting that these agreements will drive a future surge in uranium demand.
Paladin and Fission Merge for Uranium Supremacy
In June 2024, Paladin agreed to acquire Canada-based Fission Uranium Corp. (TSE:FCU) in a move to establish a globally significant and diverse uranium producer. The deal is still awaiting regulatory approval.
Upon completion, the combined entity will become the biggest dedicated uranium producer, holding 544 million pounds of uranium resources and 157 million pounds of ore reserves from both open-pit and high-grade underground mines.
Is Paladin Energy a Good Buy?
According to TipRanks’ rating consensus, PDN stock has a Strong Buy rating based on seven Buy recommendations. The Paladin Energy share price target is AU$14.55, which shows growth of 13% at the current price level.
