Big tech’s artificial intelligence (AI) plans could see greater demand for nuclear power. With the need to power data centers and other tech with heavy power requirements, companies could be tapping into nuclear energy as a viable option.
In turn, this could provide further tailwinds for uranium prices. Prices have already been rallying and could see even more upside, giving uranium-focused exchange-traded funds (ETFs) excellent growth prospects.
“Major tech companies, including Microsoft, Google and Amazon, are investing in nuclear energy, including Microsoft’s deal to restart the Three Mile Island reactor, to meet the rising energy demands for AI data centers,” reported Kitco News.
To meet increased demand, there needs to be sufficient supply to meet it. This is where uranium mining is crucial, thus causing a revival in bringing abandoned mines back to life. Research from Yale University revealed that the International Atomic Energy Agency said 100,000 tons of uranium will be necessary by 2040, resulting in an increased need for mining.
“Everyone is convinced there is going to be a much larger demand for uranium going forward,” said Matthew Wald, energy analyst at the American Nuclear Society. “The domestic uranium mining industry is being brought back to life.”
Get Uranium Exposure Via Miners
As opposed to investing in uranium prices via futures contracts, another option is to do so via miners. In particular, Sprott has a pair of funds to consider: the Sprott Uranium Miners ETF (URNM ) and the Sprott Junior Uranium Miners ETF (URNJ ).
URNM tracks the North Shore Global Uranium Mining Index. It invests in global firms that mine, develop, and produce the metal. It also invests in firms that hold the physical metal, or royalties from it. The fund is an ideal pathway for investors to get exposure to rising prices of the element. It also provides a portfolio diversification tool that allows for uranium exposure without actually investing in the commodity itself.
For investors who want even greater growth potential, small-cap companies can offer amplified moves when markets trend toward the upside. Investors could create a small-cap uranium mining portfolio of individual stocks, but an easier way is via URNJ. 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.
For more news, information, and analysis, visit the Gold/Silver/Critical Minerals Channel.
Past performance is no guarantee of future results. One cannot invest directly in an index. For the latest standardized performance and important risk disclosures regarding Sprott investment products, including each fund’s prospectus, which should be read carefully before investing, please review each product’s webpage by clicking on the corresponding ticker:
Exchange Traded Funds (ETFs): SETM, LITP, URNM, URNJ, COPP, COPJ, NIKL, SGDM and SGDJ
Physical Bullion: PHYS, PSLV, CEF and SPPP
