Stock price hits a new high! Westinghouse Electric secures a huge order from the U.S. government, major shareholder Cameco's market value skyrockets by nearly $9 billion overnight
Cameco's market value surged nearly $9 billion overnight due to an $80 billion agreement with the U.S. government, with its stock price reaching an all-time high. The agreement will facilitate Westinghouse Electric in constructing new nuclear reactors, which is expected to bring sustained high-profit revenue to Cameco. Analysts believe this deal is beneficial for Cameco and may encourage Westinghouse Electric to pursue an initial public offering in 2029
According to Zhitong Finance APP, on Tuesday, Cameco (CCJ.US), one of the world's largest uranium fuel suppliers and a Canadian uranium mining company, saw its market value rise by over CAD 12 billion (approximately USD 8.7 billion), with its stock price hitting an all-time high. This surge was due to the announcement by its subsidiary, Westinghouse Electric, of an agreement with the U.S. government to build new nuclear reactors worth at least USD 80 billion. The stock rose by more than 23% by the close of U.S. markets on Tuesday, and its increase has exceeded 100% so far this year.
The U.S. government has urged Westinghouse Electric to construct large nuclear reactors to accelerate the application of nuclear energy and artificial intelligence in the country. As a result, Westinghouse Electric reached an USD 80 billion agreement with the U.S. government. Cameco holds a 49% stake in Westinghouse Electric, while Brookfield Asset Management and Brookfield Renewable Partners hold the remaining 51%.
Cameco's CEO Tim Gitzel stated in a press release, "We look forward to this collaboration driving growth for Westinghouse Electric and Cameco's nuclear products, services, and technologies globally." The company's stock has soared this year, even before the latest cooperation agreement, due to the increasing demand for electricity in the artificial intelligence sector, which has driven up the demand for nuclear energy and uranium supply, leading to tighter supply.
Analysts believe this deal is beneficial for Cameco. JP Morgan analyst Mark Strouse wrote in a report to clients, "Each reactor built requires decades of fuel supply and maintenance services, which will provide high profits and a steady revenue stream for Westinghouse Electric and its owners."
If Westinghouse Electric's valuation reaches at least USD 30 billion by January 2029, the U.S. government could require it to conduct an initial public offering. Cameco acquired its stake in Westinghouse Electric for USD 2.1 billion in 2023
