Paladin Energy Ltd (ASX: PDN) shares have risen 42.72% over the past month.
Yesterday alone, the ASX uranium share shot the lights out with a 10.99% gain on news that Amazon (NASDAQ: AMZN) intends to invest in nuclear power to run its data centres.
The Paladin Energy share price closed at $13.03 yesterday.
Why are Paladin Energy shares storming higher?
Uranium futures have risen to two-month highs, hovering at about US$83.15 per pound at the time of writing. This represents a 4.59% gain over the past month.
Trading Economics analysts explained that this was due to a bullish demand outlook for nuclear power, and thus uranium, driven by several factors.
These include economic stimulus in China, which would support demand for energy.
At the same time, monetary policy easing would support China's ongoing investment in nuclear power.
China is building 22 of the 58 nuclear reactors under construction worldwide.
The analysts added that the US President's Climate Adviser had said that re-starting nuclear plants was essential for the country's energy supply.
On top of all that, two major US tech companies have announced major investments in nuclear power to advance their future artificial intelligence needs.
Yesterday, Paladin Energy shares ripped higher after Amazon Web Services revealed a plan to invest more than US$500 million in nuclear power.
The first step will be exploring the development of a small modular nuclear reactor near an existing nuclear station.
Amazon Web Services CEO, Matthew Garman, commented:
We see the need for gigawatts of power in the coming years, and there's not going to be enough wind and solar projects to be able to meet the needs, and so nuclear is a great opportunity.
Microsoft (NASDAQ: MSFT) is also investing in nuclear power. Last month, Microsoft announced a 20-year power purchase agreement with Constellation Energy (NASDAQ: CEG).
All of this recent news has created upward momentum for the Paladin Energy share price.
Is it too late to buy Paladin Energy shares?
On the CommSec trading platform, nine out of nine analysts rate Paladin Energy shares a 'strong buy'.
In a recent update, Monash Investors Small Companies Fund explained why Paladin is a key holding for them:
While the uranium price has risen sharply over the past 18 months, the scope for further significant gains is evident from the continued supply/demand shortfall in the market.
Paladin is one of the few operational uranium producers in Australia. It has successfully recommissioned the Langer Heinrich mine in Namibia, and is in the process of acquiring development asset, Fission Uranium in Canada.
Once complete Paladin will become a globally significant uranium producer.
Monash says Paladin Energy has a "rock-solid balance sheet, and significant free cashflow generation".
As reported in the Australian Financial Review (AFR), Darko Kuzmanovic, the senior portfolio manager of Janus Henderson's Global Natural Resources Fund, is also backing Paladin Energy shares for growth.
Kuzmanovic said uranium futures could "easily" get to US$120 a pound from here because supply isn't keeping up with demand for nuclear energy.
He said:
There's an emerging supply gap that needs to be filled by new capacity, so that's why prices have risen, and we expect them to be stronger for longer, particularly over the next few years.
The fund holds Paladin Energy shares as well as NexGen Energy Ltd (NYSE: NXE) and Uranium Energy Corp (FRA: U6Z).
What's happening with other ASX uranium stocks?
As stated earlier, Paladin Energy shares have risen 43% over the past month.
Over the same time period:
