Artificial intelligence remains a hot topic, captivating consumers, businesses, and investors alike. Speaking toward the latter, this could open opportunities in uranium-focused ETFs, as the growth of AI requires a heavy draw on alternative energy sources like nuclear power.
Because AI requires a heavy dose of processing power to run its applications, data centers can require copious amounts of power that an electric grid may not be able to provide. Magnificent Seven tech names like Amazon, Google, and Microsoft are already exploring methods to harness nuclear power regarding fueling their expanding data centers.
'Nuclear Is Emerging as a Leading Solution'
“Surging artificial intelligence (AI) workloads and the exponential growth of data centers are intensifying the global search for scalable, carbon-free baseload power, and nuclear is emerging as a leading solution,” noted a recent Sprott Uranium Report, noting that Google announced funding for the development of three nuclear sites.
The Sprott report also said that they will consumer 2.5 times more power by the year 2030. That power demand is equivalent to entire electricity usage in the country of Japan.
After April’s tariff volatility, uranium prices are also starting to exhibit signs of stability. This could present a buy-the-dip opportunity for short- or long-term investors.
“After a period of volatility and hesitation, recent developments, from policy clarity around U.S. tariffs to an inevitable resumption in utility contracting, have started to clear the path forward,” noted the Sprott report. [“Short-term] investor sentiment has been shaped by geopolitical noise and macro uncertainty. [Long-term] drivers of the uranium bull market remain solidly intact.”
A Pair of Options for Investment
As mentioned, short-term traders looking to capitalize on increasing uranium prices in the interim or long-term investors interested in growth opportunities have a pair of mining options from Sprott. Consider exposure via the Sprott Uranium Miners ETF (URNM ) or the Sprott Junior Uranium Miners ETF (URNJ ). Miners offer an indirect play, capitalizing on rising uranium demand. That, in turn, boost demands for mining.
For a broad-based solution that includes mining companies of various market capitalization sizes, URNM is ideal. It tracks the North Shore Global Uranium Mining Index. That index measures the performance of companies entrenched in the uranium mining industry. It also invests in firms that hold the physical metal, or that derive royalties from it.
An Easier Way
URNJ is the fund for non-risk averse investors looking for greater growth potential and don’t mind the added volatility of small-cap companies. Investors could create a small-cap uranium mining portfolio of individual stocks. But URNJ offers an easier way. The fund seeks to provide investment results that correspond generally to the total return performance of the Nasdaq Sprott Junior Uranium Miners Index. That index tracks mid-, small-, and micro-cap companies in the metal’s mining business. The midcap exposure can help ease some of that small- and micro-cap volatility. That’s because those companies exhibit growth potential and the stability of large-cap companies.
For more news, information, and analysis, visit the Gold/Silver/Critical Minerals Channel.
For more news, information, and analysis, visit the Gold/Silver/Critical Minerals Channel.
An investor should consider the investment objectives, risks, charges, and expenses carefully before investing. To obtain a Prospectus, which contains this and other information, contact your financial professional or call 888.622.1813. Read the Prospectus carefully before investing, which can also be found by clicking one of the links below.
Past performance is no guarantee of future results. One cannot invest directly in an index.
Funds that emphasize investments in small/mid-cap companies will generally experience greater price volatility. Diversification does not eliminate the risk of investment losses. ETFs are considered to have continuous liquidity because they allow an individual to trade throughout the day. A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses, affect the Fund’s performance.
Sprott Asset Management USA, Inc. is the Investment Adviser to the ETFs. ALPS Distributors, Inc. is the Distributor for the ETFs and is a registered broker-dealer and FINRA Member. ALPS Distributors, Inc. is not affiliated with Sprott Asset Management USA, Inc. or VettaFi.
Exchange Traded Funds (ETFs): GBUG, SLVR, SETM, LITP, URNM, URNJ, COPP, COPJ, NIKL, SGDM and SGDJ
