I am particularly bullish about NexGen Energy for several reasons, ranging from nuclear-political tensions to chart analysis. Zacks Equity Research has pinpointed the upward chart trend perfectly. Over the last year, NXE has increased by 45%, and to further highlight the company’s strong momentum, the stock price has risen by 42% in just the last month. This upward movement reflects the growing confidence in the company and its prospects. Let me explain why you should consider adding NXE to your portfolio now, as it continues to show strong growth potential.
Zacks Equity Research & 200-day MA
After reaching a key support level, could NexGen Energy (NXE) be your next smart pick? Let’s break it down. From a technical perspective, NXE has just surpassed resistance at the 200-day moving average, signaling a potential long-term bullish trend.
Now, if you’re not familiar, the 200-day simple moving average is a critical tool for traders and analysts. It helps assess long-term market trends for stocks, commodities, and more, often serving as a key support or resistance level.
Here’s where it gets interesting—NXE has surged 42% in the last four weeks alone. Combine that with the fact that the company holds a Zacks Rank #3 (Hold), and you’ve got a stock with real potential for more upward movement.
But wait, there’s more. NXE’s earnings estimate revisions are a game changer. In the past two months, no estimates have dropped for the current fiscal year, while one has gone higher, pushing the consensus estimate up as well.
Analysts Are Bullish
Analysts remain highly optimistic about the stock, as seen by the 17 professionals offering price forecasts. They estimate that NexGen could reach a high of $15.24, representing an impressive potential gain of 87.90%. Even the lowest price estimate, $7.26, implies only a modest downside risk of 10.53%. Furthermore, analysts have overwhelmingly rated NexGen Energy as a “Strong Buy,” with 15 analysts marking it as such, and 2 giving it a “Buy.” This strong consensus suggests confidence in the stock’s growth prospects, driven by its strategic position in the uranium market and potential future gains.
10% of the Global Uranium Supply Could be Locked by NexGen
The uranium market is currently facing a significant supply-demand imbalance, with global demand projected to rise by 127% by 2030 and 200% by 2040. Existing mining operations are proving insufficient to meet this growing demand, exacerbated by the decommissioning of aging mines and the slow development of new projects. This widening supply gap poses a serious challenge to the nuclear energy sector, which relies heavily on a stable uranium supply for its long-term sustainability.
NexGen Energy (NXE) is strategically positioned to address this pressing issue through its Rook I Project, one of the most promising uranium developments globally. With the potential to produce nearly 30 million pounds of uranium annually, this project could account for over 10% of the global uranium supply. Such a significant contribution would not only help stabilize the market but also support the expansion of nuclear energy, which is increasingly being recognized as a critical component of the global transition to clean energy sources.
NexGen Energy boasts a robust financial foundation, underpinned by a strong capital structure that supports its ambitious development agenda. The company has issued approximately 565 million shares, with an additional 46 million options, bringing the total to 611 million shares on a fully diluted basis. NexGen’s liquidity is well-secured, with cash reserves amounting to approximately C$572 million, ensuring the company has the financial resources to advance its projects without encountering significant fiscal challenges.
The ownership structure further reinforces confidence in NexGen’s future. Institutional investors hold a commanding 74% of the company’s shares, signaling strong faith in its prospects. Retail investors account for 21%, while management retains a 5% stake, effectively aligning their interests with those of shareholders, fostering long-term growth and accountability.
NexGen and AI Needs
As we move into an AI-driven era, a major challenge looms: the vast energy demand it brings. The International Energy Agency warns that energy consumption from AI and cryptocurrency data centers could double by 2026. These centers, which consumed around 460 terawatt-hours (TWh) annually just two years ago, are projected to need over 1,000 TWh each year moving forward.
However, there’s a critical issue—our nuclear power plants, which could help meet this demand, are steadily closing. Since 2012, more than a dozen U.S. plants have shut down, primarily due to financial challenges. Single-reactor plants struggle to stay profitable in a volatile electricity market, and the legacy of incidents like Three Mile Island continues to cast a shadow over nuclear energy in the U.S.
Currently, only 54 nuclear plants with 94 reactors remain operational. Yet, as technology companies build massive data centers to support AI systems, the big question is whether they can meet their energy and climate goals without nuclear power’s steady, reliable output.
The intersection of AI growth and the decline of nuclear energy is indeed critical. As the demand for energy skyrockets due to advancements in AI, the need for stable, reliable power sources becomes more pressing. This is where NexGen Energy (NXE) stands to benefit significantly. With nuclear energy facing challenges in the U.S., there is a growing gap in energy supply that uranium producers like NXE can help fill. The company’s projects, such as Rook I, are positioned to meet the rising demand for uranium, which is essential for maintaining nuclear power’s role in the global energy landscape.
