Are AI concerns creating a ripple effect on ASX Uranium stocks?

Uranium stocks on ASX were under massive selling pressure for a second straight day as investor sentiment weakened around the outlook for artificial intelligence related power demand. The decline reflects concerns that a slowdown in AI adoption could reduce the expected rise in electricity consumption, particularly from energy intensive data centres which were viewed as a major driver of future nuclear demand. The sell off followed a weaker than expected sales forecast from Advanced Micro Devices which led markets to reassess earlier assumptions around the pace of AI growth.

Investors are questioning whether nuclear power will be required as quickly or at the scale previously expected to support data centre energy needs. Additional pressure comes from concerns around returns on capital from large AI related capital expenditure as evident by the recent pullbacks in big tech companies like Alphabet and Amazon.

Paladin Energy Limited (ASX: PDN) declined almost 11% on Friday as there has been a fall in uranium spot prices from recent highs near US$100/lb to around US$85–87/lb which reduced near-term revenue expectations.

The company delivered a strong December 2025 quarter which was supported by higher uranium prices earlier in the year while the current market capitalisation stands at $4.95 billion.
Uranium production rose to 1.23 million pounds of uranium oxide which represents a 16% quarter-on-quarter increase while sales volume reached 1.43 million pounds at an average realised price of US$71.8 per pound.

The quarter ended with a very strong balance sheet holding US$278.4 million in cash and investments while management reaffirmed that the ramp-up to full mining and processing operations remains on track by the end of FY26 with full operations planned for FY27.

Deep Yellow Limited (ASX: DYL) 

declined 12% on Friday which brings the current market capitalisation down to just $2.14 billion.
The company reported solid quarterly progress at its flagship Tumas Project in Namibia where detailed engineering is now over 60% complete, bulk earthworks have reached 24% and a power supply agreement has been executed which keeps the project on track for a final investment decision.

Balance sheet is a key strength with cash of $187.1 million at 31 December 2025 which provides funding flexibility as development moves ahead across the Tumas, Mulga Rock and Alligator River projects.

A major milestone during the quarter was the completion of an Independent Technical Expert report at Tumas which identified no material flaws.

With multiple advanced assets in tier one jurisdictions and a clear pathway to production, the recent share price weakness appears to be at odds with the solid project fundamentals.

(Source: Company Announcements)