Some of the glow has come off of uranium prices, but that doesn’t mean nuclear stocks are about to melt down.
After shooting to their highest point since 2007 earlier this year on concerns about supply amid expectations of surging global demand, prices have retreated as supply concerns eased. Still, uranium prices remain well above the low point they hit after a nuclear reactor disaster in Japan in 2011 prompted a wave of reactor closures around the world.
Even though shorter-term supply worries have eased amid expectations of higher production from the world’s biggest miner Kazatomprom (ticker: OTC: NATKY), uranium prices remain supported because of longer-term demand expectations.
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For years, electricity demand in the U.S. was relatively stable, but that is expected to change as data centers need more power for complex artificial intelligence computation. Microsoft Corp. (MSFT), Alphabet Inc.’s (GOOG, GOOGL) Google and Amazon.com Inc. (AMZN) want nuclear power to run data centers.
Although the U.S. is a big market for companies who build, operate and supply nuclear reactors, it’s hardly the only source of growth.
“Whilst the U.S. makes a lot of noise about nuclear energy, in reality, the true growth is outside the USA,” says Vince Stanzione, CEO at First Information, a publisher of educational materials related to financial spread betting and derivatives trading.
Currently, there are about 60 reactors under construction in 16 countries, according to the World Nuclear Association. Around 90 nuclear reactors are planned, and more than 300 have been proposed.
This is a far cry from the 65 nuclear reactors worldwide that were either shut down or did not have their life spans extended after the disaster in Japan.
The reason for the switch is the energy transition away from fossil fuels. More electricity will be needed to charge electric vehicle batteries and power industries that are electrifying. Not all of that power can be supplied by solar, wind and grid-scale batteries.
To keep the lights on, governments and an increasing number of environmentalists concede that the globe will need nuclear power to provide a non-carbon-emitting source of baseload power, especially given AI’s ravenous electricity needs.
With that backdrop, here’s a look at five ways to play the nuclear renaissance:
| Stock/ETF | YTD Return as of Nov. 8 |
| Cameco Corp. (CCJ) | 21.9% |
| Centrus Energy Corp. (LEU) | 68.7% |
| NuScale Power Corp. (SMR) | 644.4% |
| VanEck Uranium and Nuclear ETF (NLR) | 26.6% |
| Range Nuclear Renaissance ETF (NUKZ) | 42.1%* |
*90-day return.
Cameco Corp. (CCJ)
Uranium comes from the ground, which means it must be mined. While many small mining companies have been ramping up uranium production and exploration, they can be quite risky, although their upside can be quite substantial.
“The issue with uranium mining stocks, similar to gold mining stocks, is the high risk, and in most cases the companies never get into profitable production,” Stanzione says.
As a mining company, Cameco is subject to uranium price movements, which can be volatile even though they are expected to remain firm over the long term. Still, Cameco is the world’s second-biggest miner of uranium, behind Kazatomprom. So Cameco is less risky than exploration companies that aren’t yet in production.
Cameco also has investments across the nuclear fuel cycle, including ownership interests in a nuclear technology equipment manufacturer and a laser uranium enrichment technology company.
Investors interested in the uranium mining sector, but who want to spread out the risk, can consider the Sprott Uranium Miners ETF (URNM) for bigger miners and Sprott Junior Uranium Miners ETF (URNJ) for smaller players.
“I prefer to trade the actual uranium price rather than the miners,” Stanzione says. “I believe uranium prices could gain at least 25% in 2025 regardless of what stock markets do.”
Investors can get exposure to the uranium price itself with the Sprott Physical Uranium Trust (OTC: SRUUF).
Centrus Energy Corp. (LEU)
Current large reactors use low-enriched uranium to produce electricity. Advanced reactors and more than half of designs for an emerging technology called small modular reactors in development use a more concentrated form of uranium called high-assay, low-enriched uranium (HALEU), the World Nuclear Association says.
Centrus is the only company in the U.S. with a license to make HALEU, and it has been producing small quantities.
With this license and manufacturing experience, Centrus is well positioned to make the fuel for a growing number of advanced reactors, small modular reactors and micro reactors. HALEU can also be used in conventional reactors.
NuScale Power Corp. (SMR)
One of the U.S. Department of Energy’s goals is to foster a domestic or friendly nation supply chain for low-enriched uranium for current reactors and the next generation of nuclear technologies. Part of that future will include small modular nuclear reactors like those NuScale designs and markets.
The company says its pressurized water reactors can generate 77 megawatts of electricity each and can be scaled up to more than 900 megawatts. The design is smaller than a traditional nuclear reactor and can be used to replace retiring coal plants and provide baseload power.
NuScale has U.S. Nuclear Regulatory Commission certification for one of its designs, giving it a foothold in the emerging nuclear renaissance.
VanEck Uranium and Nuclear ETF (NLR)
Investors who want to spread out the risk with a more diversified investment than single stocks can consider exchange-traded funds, or ETFs, which trade under a single ticker symbol but contain many stocks.
This ETF invests in uranium mining companies; companies that build, engineer, and maintain nuclear power facilities and reactors; companies involved in the production of electricity from nuclear sources; and companies that provide equipment, technology or services to the nuclear power industry.
This fund has an expense ratio of 0.61%, or $61 per year for every $10,000 invested.
Range Nuclear Renaissance ETF (NUKZ)
Like the VanEck ETF, this fund is diversified along the nuclear supply chain, giving investors exposure to companies involved in advanced reactors, utilities, construction, services and fuel. NUKZ has an expense ratio of 0.85%.
Both of these funds include utilities, which can give them a defensive tinge. Utilities are unlikely to outperform growth stocks during times of economic expansion and stock market optimism. But when the tide turns and economic uncertainty increases, utilities can act as a portfolio cushion because houses and businesses need electricity year-round, regardless of economic conditions.
As the nuclear renaissance gains steam, more utilities may expand their nuclear footprints.
On Sept. 20, utility Constellation Energy Corp. (CEG) said it would restart a unit at the Three Mile Island nuclear power plant in Pennsylvania, with Microsoft agreeing to purchase energy from the revived plant to power its data centers.
Ten days later, the Department of Energy said the operator of the Palisades nuclear plant in Michigan will receive a $1.5 billion loan to help restart the plant’s reactor, marking the first revival of a shuttered nuclear plant in U.S. history.
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5 Best Nuclear Energy Stocks and ETFs to Buy Now originally appeared on usnews.com
Update 11/11/24: This story was previously published at an earlier date and has been updated with new information.
