Over the past few years, the phrase “nuclear renaissance” has been frequently used. And it’s not hyperbole. Some ETFs confirm nuclear energy’s rebirth is not only legitimate, but there’s much more to come.
Take the case of the VanEck Uranium and Nuclear ETF (NLR ). Home to nearly $323 million in assets under management, NLR turned 17 years old in August. But these days, the ETF is arguably as popular as it’s ever been. A 27.44% gain over just the past month is a contributing factor in that popularity surge as is a YTD surge of almost 32%.
However, investing isn’t a popularity contest. It’s about fundamentals and performance. As noted above, NLR checks the latter box. But equally as important is the fact that the nuclear energy rebirth is rooted in legitimate fundamentals.
NLR Has Multiple Tailwinds
Integral to the longer-ranging NLR thesis is the point that the ETF and its holdings have been galvanized by multiple factors. These include renewed regulatory support for nuclear power, among others.
“Rapidly growing electricity demand [is] due to the rise of AI technology, electric vehicles and cryptocurrency,” according to VanEck. “Demand for reliable, clean energy source [is driving a] global effort to reduce greenhouse gas emissions.”
Another reason nuclear power is enjoying a rebirth is shifting public sentiment. What was once viewed by some as a controversial or risky source of energy is now being hailed for its abundance, cost effectiveness, and reliability.
More Entities Eye Nuclear as Legitimate Green Energy Alternative
Also vital in the nuclear equation is this energy source’s status as clean-burning. That is to say nuclear is cleaner than fossil fuels. Combine that with reliability that exceeds that of some forms of renewable energy and it’s easy to see why more companies and governments are recognizing nuclear as a legitimate green energy alternative.
Nuclear’s controversies were decades in the past and the narrative shifting for the better. So adopters have an array of reasons to consider this power source. That improving narrative and reliability are among the reasons artificial intelligence companies are increasingly turning to AI, providing NLR with a long-term growth avenue in the process.
“Nuclear energy’s ability to deliver consistent, low-carbon power makes it an ideal candidate to meet rising electricity needs. This renewed interest is evident in the recent deals by major tech companies to meet the power demands of next-generation data centers, including Microsoft’s agreement with Constellation Energy to restart Three Mile Island and Google’s agreement to purchase power from Kairos Power," said Brandon Rakszawski, director of product management at VanEck. “These deals underscore the critical role nuclear energy plays in enabling the future of technology.”
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