The spot price for uranium, the crucial element for producing nuclear power, has roughly doubled over the past five years. That growth was fueled by the world's renewed interest in nuclear power as a clean energy source, geopolitical conflicts driving more markets away from fossil fuels, and rapid expansion of the power-hungry artificial intelligence, cloud, and data center markets.

Bank of America expects uranium's spot price to nearly double from about $67 per pound today to $120 by the end of 2025, then rise to $135 in 2026 and $140 in 2027. At the end of 2024, the International Atomic Energy Agency (IAEA) predicted the world's nuclear capacity could increase 2.5 times from its current capacity by 2050 in a "high case scenario."

Image source: Getty Images.

One of the most straightforward ways to profit from that nuclear supercycle is to invest in Cameco (CCJ 0.88%), one of the world's leading producers of uranium. The Canadian miner produced roughly 5% of the world's uranium in 2023, and it's the largest publicly traded uranium miner.

It operates mines and mills across Canada, the United States, and Kazakhstan. The company's stock price has already surged more than 330% over the past five years, but will it head even higher over the next 12 months?

What happened to Cameco over the past few years?

Cameco, like other miners, is tightly tethered to the cyclical price swings of its underlying commodity. Moreover, macro headwinds, tariffs, trade tensions, and geopolitical conflicts could disrupt its mining operations.

The spot price of uranium actually rose in 2020 and 2021, but the pandemic forced the company to suspend some of its mining operations. That's why its revenue declined in both years as it turned unprofitable on an adjusted basis.

Data source: Cameco.

But after that setback, the business recovered over the following three years as the pandemic passed, Its gross margins expanded, and it turned profitable (on an adjusted basis) again.

To reduce its long-term volatility and increase its exposure to the growing nuclear power market, Cameco partnered with the Canadian infrastructure investment company Brookfield Asset Management (BAM 0.02%) to acquire Westinghouse Electric -- a key designer, builder, and supplier of nuclear power plants -- in late 2023. Cameco now owns 49% of Westinghouse Electric, while Brookfield owns the remaining 51%.

The miner's stake in Westinghouse should generate more-consistent cash flows than its cyclical uranium business. It should also make it the preferred uranium supplier for Westinghouse's nuclear power plants.

What will happen to the stock over the next year?

For 2025, analysts expect the company's revenue to rise 8%; its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to more than double, and its adjusted earnings to increase 87%. Based on those expectations, the stock doesn't seem cheap at eight times this year's sales and 53 times its forward adjusted earnings. However, it only trades at 17 times this year's adjusted EBITDA, which cuts through the near-term noise from the Westinghouse acquisition.

Therefore, Cameco might be a good long-term play on the uranium market, but investors should brace for lots of near-term volatility. It expects the Trump administration's tariffs against Canada to drive up its prices in the U.S. by about 10%, and that pressure could delay some big nuclear projects.

However, most of its U.S. customers are still well supplied through 2026 and locked into long-term contracts, so any pressure from those tariffs probably won't throttle its near-term growth.

That said, I'm not sure investors will dive back into nuclear stocks unless the trade tensions wane. So while Cameco is an attractive nuclear play, its stock might trade sideways or slip lower over the next 12 months until those issues are resolved.