Beyond the Data Center: Critical Minerals Driving AI

“Commodity markets entered 2026 with a decisive change in tone,” the report noted. “After years of shrinking representation in global portfolios, commodities and resource equities have broken out above multi-year trading ranges, an action that, in our view, marks the developing stages of the new commodity bull market.”

This environment is creating a sharp divergence between natural resources and critical minerals essential to building the modern infrastructure. In turn, this creates potential opportunities in the Sprott Critical Materials ETF (SETM) and Sprott Active Metals & Miners ETF (METL).

The report noted that markets have entered an era where hard assets are no longer simple cyclical inputs, but strategic necessities. Global governments are now prioritizing resource sovereignty and domestic supply chains to mitigate risk related to geopolitical fragmentation.

The secular growth of artificial intelligence (AI) also drives this trend. The need for an AI infrastructure buildout includes data centers, upgraded power grids, and the mass electrification of industrial processes. This in turn, could propel  critical minerals such as copper and uranium.

For instance, copper serves as the backbone of said electrification. In the report, Sprott underscored the need for copper miners to help meet the demand for the AI-driven industrial boom where electricity plays a critical role.

On the energy front, the focus is shifting from oil-gas to nuclear power as a viable energy source. With that, uranium enters a cycle marked by constrained supply amid higher global demand as nations are seeking energy alternatives.

In the current environment, Sprott noted that the potential benefits of precisional pure-play exposure in critical minerals. That said, SETM can serve this purpose as it includes constituents that derive at least 50% of their revenue or assets from critical materials.

Active management has been in demand in an ETF wrapper this year, which makes METL potentially ideal for those seeking an even more dynamic approach. METL leverages Sprott’s deep geological and economic expertise to allow for greater flexibility when navigating jurisdictional risks and shifting fundamentals in metal markets.

Whether it’s exposure to SETM or METL, specialist expertise is likely highly valuable. The funds offer disciplined vehicles seeking to capture the potential upside in the commodity supercycle with the transparency, cost-efficiency, and flexibility of an ETF.

While large-cap companies may be generally less volatile, small-caps can provide the growth. As such, SGDJ targets small-cap mining companies that are often in the exploration or early production phases of mining life cycle.

Junior miners generally carry more price sensitivity with regard to gold versus their large-cap counterparts. When price increases occur in spot gold, profit margins for these small-cap companies have the potential to expand exponentially. For investors who already have exposure to gold as part of their core portfolio, SGDJ could potentially capture rapid moves in the precious metals market.

Together, SGDM and SGDJ could build a comprehensive precious metals sleeve. Indeed, these Sprott ETFs offer a disciplined approach to miners of the reliable long-term store of value.

For more news, information, and analysis, visit the Gold/Silver/Critical Minerals Content Hub.

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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): SETM, LITP, URNM, URN, COPP, COPJ, NIKL, SGDM, SGDJ, SLVR, GBUG, METL

Physical Bullion Funds: PHYS, PSLV, CEF, and SPPP.

Gold and precious metals are referred to with terms of art like store of value, safe haven and safe asset. These terms should not be construed to guarantee any form of investment safety. While “safe” assets like gold, Treasuries, money market funds and cash generally do not carry a high risk of loss relative to other asset classes, any asset may lose value, which may involve the complete loss of invested principal.