Shares in uranium, nuclear fuels, and services company Cameco Corporation (NYSE: CCJ) rose by 12.6% in October, according to data from S&P Global Market Intelligence. The move comes in an improving backdrop for stocks aligned with the nuclear industry, and Cameco is the best way to get pure-play exposure to the industry listed on the stock market.

Sentiment, not near-term earnings

Some stocks trade on quarterly earnings, and their share price reflects an almost minute-by-minute commentary on quarterly sales or other such metrics. Alternatively, some stocks trade more on sentiment over their long-term growth prospects. Cameco is more of the latter, and the good news is there's a real sense of optimism around nuclear energy right now.

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Hard facts back that optimism. For example, the burgeoning demand for power to run data centers promulgated by AI applications has led IT giants Microsoft, Alphabet's Google, and Amazon.com to sign agreements to buy power from nuclear power plants this year. Microsoft signed a 20-year power purchase agreement with Constellation Energy that will restart the Three Mile Island nuclear plant. Google signed a deal in October to buy power from Kairos Power's small modular reactors (SMR) with both companies expecting Kairos' first SMR to be online by 2023. Finally, Amazon signed a deal to buy power from Talen Energy.

Cameco Corporation

All of which is excellent news for Cameco. The company provides uranium and nuclear fuel to 37 nuclear utilities worldwide, but 58% of its volume comes from America. As such, it has key exposure to the North American market, and since the leading cloud service providers are American companies -- Amazon Web Services, Microsoft's Azure, and Google Cloud -- and the U.S. dominates the market for both cloud services infrastructure and data centers , Cameco is well placed to benefit in its home market.

Is the move justified?

There's no doubt that there's been a change of thinking over the clean energy transition, and natural gas and nuclear energy are seen as having a more important role than previously envisaged. Furthermore, nuclear power doesn't produce carbon emissions, so the investment by the tech giants helps them meet their emissions goals.

That said, there's still uncertainty around the matter. For example, U.S. regulators recently blocked the Amazon/Talen agreement on the ground that it could divert power supplying the grid. That's one example of the hurdles that the nuclear industry has to cross.