February's Nuclear Energy Stocks Present Compelling Opportunities for Long-Term Investors

The nuclear energy sector is experiencing a significant renaissance, with governments worldwide recognizing atomic power as a critical solution for clean, reliable electricity generation. President Donald Trump has set an ambitious target to quadruple U.S. nuclear capacity by 2050, while several nations are pursuing similar aggressive expansion plans. This surge in policy support, combined with supply constraints driven by geopolitical tensions, has created an attractive environment for nuclear energy stocks. While recent market corrections have depressed valuations, investors examining Cameco (NYSE: CCJ) and Centrus Energy (NYSE: LEU) may find both companies worthy of closer consideration for February purchases and beyond.

Why Nuclear Energy Stocks Are Gaining Strategic Importance

The fundamental case for nuclear energy stocks rests on two pillars: accelerating demand and constrained supply. On the demand side, industrialized nations increasingly recognize that nuclear power represents one of the few reliable, low-carbon energy sources capable of meeting future electricity needs. This shift reflects growing climate awareness and the limitations of renewable energy alone.

Supply dynamics tell an equally compelling story. Russia has historically supplied a substantial portion of enriched uranium globally, but geopolitical tensions have disrupted these flows. In May 2024, following Russia’s invasion of Ukraine, President Joe Biden signed the “Prohibiting Russian Uranium Imports Act,” introducing strict limits on Russian uranium imports. While some companies initially received temporary waivers, these exemptions expire on January 1, 2028, forcing buyers to source alternatives domestically or from allied nations. This structural shift in the uranium supply chain creates significant tailwinds for North American producers.

Cameco: North American High-Grade Uranium Leadership

Cameco operates some of the world’s highest-quality uranium mines, including MacArthur River and Cigar Lake, which collectively account for a substantial share of premium uranium production. The company has delivered extraordinary returns, with shares appreciating approximately 395% since the beginning of 2023, reflecting investor recognition of improving fundamentals.

Beyond mining operations, Cameco benefits from diversified exposure to the nuclear ecosystem. The company maintains a 49% stake in Westinghouse, a global nuclear technology leader that manufactures reactor components and designs advanced systems such as the AP1000 reactors. This partnership proved strategically valuable when the U.S. government committed $80 billion in 2024 toward new nuclear reactor construction, with Cameco and Westinghouse as key participants alongside Brookfield Renewable Partners.

Cameco’s Canadian headquarters also positions it favorably as North American utilities and governments seek to diversify uranium sourcing away from Russian suppliers. As Russian import restrictions tighten and existing waivers approach expiration, Cameco stands well-positioned to capture incremental market share from customers seeking reliable, non-Russian uranium supplies.

Centrus Energy: Developing Domestic Uranium Enrichment Infrastructure

Centrus Energy operates in a more specialized segment: uranium enrichment and fuel manufacturing for commercial and defense applications. The company currently sources enriched uranium globally, including from suppliers like France’s Orano and Russia’s TENEX. However, this reliance on Russian supply creates vulnerability, particularly as Russian enriched uranium represents roughly one-quarter of U.S. imports.

To address this supply gap, Centrus received a $900 million Department of Energy contract to expand enrichment capacity at its Piketon, Ohio facility. The company aims to achieve two critical objectives: produce low-enriched uranium (LEU) for conventional reactors and manufacture high-assay low-enriched uranium (HALEU) for advanced reactor designs. Notably, Centrus holds the exclusive U.S. license to produce HALEU for both commercial and national security applications, an advantage that should persist as advanced reactor developers like TerraPower and Westinghouse accelerate commercialization timelines.

Assessing Valuation and Risk Factors

Both companies carry premium valuations relative to historical standards and broader market averages. Cameco trades at approximately 74 times projected 2026 earnings, while Centrus Energy trades at roughly 66 times forward earnings. These elevated multiples reflect market enthusiasm for nuclear energy but also introduce vulnerability to sentiment shifts and market volatility. Investors should recognize that while the fundamental case appears robust, valuation risk remains material.

The potential returns could justify current prices if the nuclear buildout accelerates as anticipated. Historical precedent is instructive: investors who purchased Netflix shares in December 2004 on the strength of the Motley Fool Stock Advisor recommendation realized gains of approximately 43,800% through February 2026. Similarly, Nvidia investors from April 2005 achieved roughly 116,400% returns. Cameco and Centrus Energy could deliver outsized returns if nuclear capacity expansion proceeds as planned, but outcomes remain contingent on policy execution and market conditions.

For investors convinced of the long-term nuclear energy transition, both nuclear energy stocks merit positions in equity portfolios. The combination of policy support, supply constraints, and technological advancement creates a structural tailwind that could sustain favorable conditions for years. That said, caution regarding current valuations is warranted, and these positions suit investors with multi-year investment horizons rather than those seeking near-term catalysts.