Meta recently announced a 20-year deal to buy nuclear power from a Constellation Energy plant in Illinois. Meta joins a collective group of large data center and cloud service providers known as “hyperscalers” — including Amazon Web Services (AWS), Microsoft Azure, Google Cloud Platform (GCP), and Oracle Cloud Infrastructure (OCI) — who have also announced commitments to secure nuclear capacity in order to power their AI infrastructure needs.
In addition, President Trump signed four executive orders related to the rapid deployment of next-generation nuclear technologies in the U.S. These orders address: 1) Deploying Nuclear Reactor Technologies for National Security, 2) Reform of the Nuclear Regulatory Commission (NRC), 3) Reform for Nuclear Reactor Testing at the Department of Energy, and 4) Reinvigorating the Nuclear Industrial Base.
Clearly, these developments are positive for the nuclear industry and its supply chain, which includes uranium. Year-to-date, both nuclear-themed and uranium ETFs have continued a rally that was kicked off last year as AI infrastructure energy demands became a rising concern.
Nuclear and Uranium ETFs
| Symbol | ETF Name | Total Assets | YTD Performance | Expense Ratio |
|---|---|---|---|---|
| URAA | Direxion Daily Uranium Industry Bull 2X | $11,100,000 | 55.16% | 1.28% |
| URA | Global X Uranium ETF | $3,564,470,000 | 34.91% | 0.69% |
| URAN | Themes Uranium & Nuclear ETF | $7,499,100 | 31.38% | 0.35% |
| NUKZ | Range Resources Nuclear Renaissance | $312,701,000 | 30.79% | 0.85% |
| NLR | VanEck Uranium and Nuclear ETF | $1,466,470,000 | 29.12% | 0.56% |
| URNM | Sprott Uranium Miners ETF | $1,585,500,000 | 14.86% | 0.75% |
| URNJ | Sprott Junior Uranium Miners ETF | $264,400,000 | 11.79% | 0.80% |
Exploring the field of choices among Nuclear and Uranium ETFs, performance clearly varies based on the portfolio composition, more specifically the percentage of uranium relative to nuclear power exposure. Nuclear power plants use uranium fuel to produce electricity, but uranium is a commodity subject to swings in supply and demand.
The top-performing ETF, the Global X Uranium ETF (URA ) has 56% exposure to uranium mining stocks. The Themes Uranium and Nuclear ETF (URAN) and the VanEck Uranium & Nuclear ETF (NLR ) both have 34% exposure to uranium mining stocks. Meanwhile, the Range Resources Nuclear Renaissance ETF (NUKZ ) offers more pure-play nuclear exposure, with only 13% exposure to uranium miners.
Another factor to consider is the percentage of electric utility exposure. The top-performer, NUKZ has a 31% allocation to electric utilities, while NLR is 46% electric utilities, and URA has only 6% electric utility exposure.
Investors should be aware of these differing exposures in order to avoid unintended overlaps and obtain the desired focus in their portfolio.
AI’s Resurrection of Nuclear
Currently, according to Wood Mackenzie, only 9% of the world’s electricity is generated by nuclear power. But new big tech demand, driven by the need for more electricity to power artificial intelligence applications like generative AI, has the potential to resurrect the entire nuclear industry.
Last September, Microsoft, like Meta, entered into a 20-year power purchasing agreement (PPA) with Constellation Energy to support the restart of Pennsylvania’s Three Mile Island Unit 1 generator. And small modular reactors (SMRs) are now part of the nuclear equation as well, with power capacities of up to 300 megawatts, a level capable of supporting the energy needs of most data centers.
We don’t need to make the case for Artificial Intelligence exposure here, but clearly nuclear is yet another industry being disrupted by AI.
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