Uranium stocks are ending the week on a strong note, with shares of Cameco (CCJ -0.13%) stock up 5.8% through 10 a.m. ET and smaller rivals Ur-Energy (URG -0.87%), Uranium Royalty (UROY -0.91%), and Uranium Energy (UEC -3.04%) doing even better -- up 8.2%, 9.9%, and 12.7%, respectively.

And all four of these nuclear stocks have just one company to thank for their rallies: Kazakhstan's Kazatomprom.

What Kazatomprom said today

As The Financial Times pointed out this morning, Kazatomprom (literally an abbreviation of "Kazakhstan atomic industry") is the world's largest producer of uranium for nuclear power. Problem is, it's planning to become a smaller producer of uranium as early as next year.

Citing "project delays and sulphuric acid shortages," Kazatomprom cut its uranium production target for 2025 by 17%, to a range of 25,000 to 26,500 metric tons. With Kazatomprom responsible for roughly 20% of world output, that means that global supplies of uranium -- which were already constrained thanks to Russia's war in Ukraine -- will fall by another 3% to 4% next year.

Worse, FT cites a Canaccord Genuity analyst warning that Kazatomprom's forecast could turn out to be optimistic. Canaccord estimates that Kazatomprom will produce closer to 23,000 tons of uranium next year, constricting global supplies even further.

Further, Canaccord observed that Kazatomprom has very few reserves to blunt the impact of a 2025 production cut. Rising demand for uranium has depleted the company's reserves of uranium already mined and ready for shipment by 31% so far this year.

Should you buy uranium stocks?

Long story short: Kazatomprom can't produce enough uranium to meet global nuclear power plant needs, so other uranium producers will need to increase their own production to fill the gap. The good news for investors is that this will mean higher prices for uranium and probably more profits for those who own shares in Cameco, Ur-Energy, Uranium Royalty, and Uranium Energy -- at least for a time.

According to Trading Economics data, the spot price on uranium today sits just under $80 per pound, down from roughly $105 per pound in February. That's already comfortably above the $60-per-pound price that economists peg as necessary to encourage production, which has been trending higher. Higher prices and the prospect of fatter profits are only going to encourage uranium miners to mine more.

What will higher production mean for the companies doing the producing? In the short term, it should mean higher profits as companies sell more uranium at higher prices.

Rising prices have already turned profitable Cameco (last year), Uranium Royalty stock (this year), and Uranium Energy (last year, although it began losing money again this year). Ur-Energy, meanwhile, still hasn't booked an operating profit since 2018. As prices keep rising, there's a good chance more of these stocks will become more consistently profitable -- at least until rising production creates oversupply and starts driving prices back down again. This is a cyclical industry, after all, and investors can't enjoy a boom without anticipating a bust lying in wait just around the corner.

So what's your best bet to play this trend?

I have to think it's to buy Cameco first of all, while keeping a watchful eye on the others. Of the four uranium stocks discussed here, it's got the best record of profitability (having earned positive net profits in six of the past 10 years). It's also the only uranium stock currently generating positive free cash flow.

At a price-to-free-cash-flow ratio of 45, Cameco stock is not cheap. But if you absolutely, positively feel you must invest in the uranium rally today, Cameco still seems the safest way to do that.