Why Shares of Cameco, Denison Mines, and Uranium Energy All Crashed Today

Monday opened bleakly for uranium mining stocks. Over the weekend, Chinese artificial intelligence (AI) start-up DeepSeek announced it has developed a large language model by the same name that took just two months and cost only $6 million to develop — yet somehow seems to be outperforming AI developed by ChatGPT over much more time and at far greater cost.

The news seems to imply that Western AI companies have been wasting their time buying way more AI chips than they need to — and that therefore, no one is going to need huge amounts of nuclear power for all these chips.

Shares of all the biggest uranium mining stocks are selling off today in response, with Denison Mines (DNN 2.89%) down 9% through 10:30 a.m. ET, Uranium Energy (UEC -1.70%) falling 10.1%, and Canada’s Cameco (CCJ 2.29%) down most of all at 13.2%.

And that’s not the end of the bad news for uranium stocks.

Uranium prices were already heading lower

Uranium prices had already been in a pronounced downturn before this new worry surfaced. From a recent high hit in February of last year, the per-pound uranium price had fallen 34% to just under $70. A brief blip higher in prices arrived in early January, with prices climbing back toward the $75 level, but that has already evaporated, as I warned it might.

And now there’s this new threat that demand won’t be as great as had been hoped. It’s driving prices even lower, as hopes for a nuclear resurgence to power AI data centers starts to fade.

On top of all this, Cameco did its industry no favors this morning by announcing that its Inkai joint venture with Kazakhstan’s national atomic energy company Kazatomprom is resuming uranium production after a three-week hiatus.

Earlier this month, Cameco said that its Kazakh joint venture had to suspend production because of a clerical error (somebody forgot to submit its updated project documentation to the local authorities). This oversight has since been corrected, however, and Inkai will now resume adding uranium supply to a market where prices were already headed lower.

How bad is this news for Cameco, Denison Mines, and Uranium Energy?

There are any number of ways for investors to read all this news, some good for uranium stocks, and some bad. Here are few of them for you:

First, yes, China has a new AI upstart. It’s free, it’s open source, and apparently it doesn’t need a whole lot of high-powered semiconductors to operate. But note the emphasis on “apparently.”

Little is known about DeepSeek at this time. The AI seems to have been up and running for a month already, but we’re only hearing about it today, and no one knows much about it. Does it really require fewer chips than Western AI models, for example? Will it really require less power to operate?

And second, if DeepSeek (and similar AIs) are cheaper to build and use, doesn’t it logically follow that they will be more popular, be used more often, and therefore end up using a lot of power anyway? That could actually be good news for nuclear energy stocks, and for uranium miners, too.

At the same time, however, nuclear investors need to keep in mind the long-term trends in uranium mining, and specifically the $60-per-pound break-even point — the price that mining experts argue is high enough to encourage miners to invest in more uranium production.

We’re still above that point right now. This implies that, for the foreseeable future, there’s going to be a tug of war going on, where uranium demand pulls prices up, but increased uranium production to supply that demand forces prices back down again.

Is it time to buy or sell uranium stocks?

If this leaves prices basically in balance, though, at current uranium prices, Denison and Uranium Energy have been losing money for three consecutive quarters right now, and even Cameco’s profits have dwindled significantly from where they were a year ago.

At current valuations, I really can’t recommend buying these money-losing uranium stocks, and I’m afraid even Cameco looks like no great value to me.