Why the Selloff May Be Overdone
AMD's stumble raised a fair question: what if AI spending slows? But here is the key point investors should not miss. The case for uranium does not depend entirely on AI.
The Structural Supply Deficit Is Still Real
Strip away the AI headline and the fundamentals remain strong. The World Nuclear Association reports 440 operating reactors across 31 countries, with 70 more under construction. Nuclear plants generated a record 2,667 TWh of electricity in 2024, the most ever.
Global uranium production met only about 90% of demand in 2024, with the gap filled by stockpiles. On the supply side, Kazatomprom has signalled reduced 2026 production, Cameco's McArthur River mine lowered 2025 output due to delays, and Niger's SOMAÏR mine saw its output effectively removed from Western supply chains following its nationalization and the suspension of exports to France in late 2025.
The uranium price outlook points to continued tightness. Long-term contract prices climbed to US$86 per pound by late 2025, up nearly 9% year-on-year, signalling that utilities are accepting higher prices.
What ASX Uranium Producers Are Doing Now
Despite the sentiment wobble, Australian producers are building for the long term.
Paladin Energy (ASX:PDN) continues ramping its Langer Heinrich mine in Namibia, reporting record post-restart quarterly production of 1.23 million pounds in Q2 FY2026, achieving a realized price of US$71.80 per pound (notably lower than current spot prices due to legacy contract lag). The company targets 4.0-4.4 million pounds for the full year.
Lotus Resources (ASX:LOT) launched a A$76 million placement on 5 February 2026 at A$2.15 per share; however, the stock has since faced selling pressure, slipping below the offer price to A$2.08 as the market digested the dilution. The funds will support its Kayelekera mine ramp-up in Malawi. The timing, raising capital during a sector pullback at a 25% discount, suggests management sees long-term value over short-term noise. Lotus targets steady-state production of roughly 2.4 million pounds per year.
Deep Yellow (ASX:DYL) continues advancing its Tumas project in Namibia, adding to new supply that will take years to reach market.
These moves reflect a sector investing through volatility, not retreating from it.
Key Takeaways for Investors
Narrative-driven trades are volatile. The AI-uranium link will stay sensitive to every headline from Silicon Valley.
The structural supply deficit is independent of AI. Reactor life extensions, new builds across Asia, and chronic underinvestment in mining create demand that exists with or without data centres.
Distinguish hype from fundamentals. The uranium spot price ended January 2026 at US$94.28 per pound, well above 2025 levels, supported by real supply constraints, not just AI sentiment.
For investors seeking data-driven resources research, ASR's Resources Portfolio provides comprehensive coverage of Australian commodity producers, including cost curve analysis and production profiles across the uranium sector.
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