Shares in Uranium Energy (UEC 5.10%) rose by as much as 11.3% in morning trading as investors digested the latest news in the ongoing tariff escalation. As of 2:10 p.m. ET, the stock was still up 6%.
President Trump ordered a probe into potentially imposing tariffs on critical mineral imports, including uranium. As such, investors have been buying domestic uranium miners, including Uranium Energy, in anticipation of potential tariffs on imports.
Uranium is in the spotlight
Uranium is a hot topic, given the increasing investment in nuclear power to supply energy to data centers in light of the boom in demand for artificial intelligence (AI) applications. All three leading cloud services companies (Microsoft's Azure, Alphabet's Google Cloud, and Amazon Web Services) signed deals to procure nuclear-powered energy last year.
Moreover, the U.S. is the largest uranium-consuming country in the world, and the supply of the radioactive metal is critical to ensuring energy independence. With assets in Wyoming, Texas, Arizona, and New Mexico in the U.S., and the largest licensed production capacity in the U.S., the company has an opportunity to thrive as a provider of domestically sourced uranium.
Image source: Getty Images.
Should investors buy in?
Given the administration's determination to ensure domestic production of critical minerals while reducing reliance on imported minerals, it makes sense to take the probe and potential tariffs seriously. While much of the tariff action appears to be tactical, precluding trade deal negotiation, it's possible that actions regarding rare earth minerals and uranium are more strategic in nature and designed to redomesticate the supply of key minerals and metals.
