AI Power Demand Ignites Uranium: Are ASX Nuclear Stocks Still a Buy at 52-Week Highs?

Australia’s uranium sector is riding a wave of demand as tech giants like Google, Amazon, and Microsoft lock in nuclear power to fuel their AI data centres. With US electricity demand from AI expected to jump 165% by 2030, nuclear energy is emerging as the go-to solution for clean, round-the-clock power. That’s turning Silicon Valley’s energy crunch into a golden opportunity for Australian investors. But with ASX uranium stocks hitting 52-week highs, the big question now is: is there more room to run?

Why Big Tech Chose Nuclear Over Everything Else

The math is brutal for tech companies. US electricity demand is projected to grow more than 15% over the next five years after remaining flat for two decades. That's not gradual growth; it's a sharp inflection driven almost entirely by artificial intelligence.

Solar and wind can't solve this problem. AI workloads need constant power around the clock. When Microsoft's algorithms are processing millions of requests at 3 am, solar panels aren't helping. Nuclear reactors run continuously with near-perfect reliability.

The deals are already moving. Google and NextEra announced plans to revive Iowa's Duane Arnold Energy Centre, bringing 615 megawatts of nuclear capacity online by early 2029. Microsoft is restarting Three Mile Island's reactor, while Amazon purchased a data centre adjacent to Pennsylvania's Susquehanna nuclear plant.

Tech companies have signed contracts for more than 10 gigawatts of new nuclear capacity in the past year, roughly ten large reactors. Each one needs uranium fuel, creating tangible demand that existing supply chains struggle to meet.

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Government Policy Adds Momentum

President Trump signed four executive orders in May 2025 specifically targeting nuclear deployment for AI infrastructure, including uranium mining expansion and accelerated reactor testing. The orders streamline permitting and designate federal lands for data centres with on-site nuclear power.

The market fundamentals are compelling. Global uranium demand will jump from 68,920 metric tonnes in 2025 to 150,000 metric tonnes by 2040, a 117% increase. Analysts project the global uranium market will reach $13.59 billion by 2032.

The catch? Small modular reactors won't reach commercial operation for at least five years. That gap between surging demand and delayed supply creates the investment opportunity but also means near-term volatility as the market prices in this structural shift.

How the ASX Big Three Stack Up

Uranium spot prices currently trade around $78 per pound, recovering from March lows but creating differentiated opportunities across Australian producers:

Paladin Energy (ASX: PDN) – The Proven Producer

• Delivered 638,409 pounds of uranium oxide in Q4 2024, with December production hitting 308,604 pounds at 88% recovery rates.
• Largest ASX uranium operation at Namibia's Langer Heinrich mine.
• Best for: Investors wanting established production and near-term cash flow visibility.

Deep Yellow (ASX: DYL) – The Strategic Wait

• Deliberately delayed the final investment decision on its Tumas project in April 2025, waiting for better uranium prices before committing capital.
• Betting on AI-driven demand pushes prices higher before construction begins.
• Best for: Those expecting price appreciation over the next 12-18 months.

Boss Energy (ASX: BOE) – The High-Risk Turnaround

• Maintains a strong balance sheet with $229 million in cash and zero debt.
• Lower-than-expected uranium recovery rates at the Honeymoon project forced reduced FY2026 production guidance.
• Best for: Risk-tolerant investors comfortable with operational challenges but attracted to turnaround potential.

For investors seeking a comprehensive analysis of cost curves and production profiles across these uranium producers, ASR's Resources Portfolio tracks operational metrics and competitive positioning in real time, helping separate sustainable operations from speculative plays.

Three Critical Investor Insights

Demand is quantifiable: Tech companies are committing billions to nuclear contracts today. This creates measurable uranium demand beyond traditional nuclear power growth, a structural shift, not a cyclical bounce.

Supply can't keep pace: New mines take 5-10 years to develop. The gap between AI-driven demand and new supply creates pricing tension that favours existing producers with operational mines.

Execution separates winners from losers: Uranium prices remain volatile. Production ramps are technically difficult. Not all companies will execute successfully, making stock selection critical rather than sector-wide exposure.

The Bottom Line

The AI-nuclear connection represents a genuine structural shift in energy markets. Government policy is aligned. Supply constraints are real. Tech giants are backing this trend with billions in capital commitments rather than pilot programmes.

But uranium remains a volatile sector where operational execution determines returns. Investors need to match company profiles with their risk tolerance: established producers for stability, strategic developers for price leverage, or turnaround stories for those comfortable with binary outcomes.

The opportunity is real, but so are the risks. For those navigating this space, thorough research beats momentum trading.

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