One of the consequences of the boom in artificial intelligence is the need for more electricity. The data centers that house the computers that crunch the numbers gobble up a lot of power.
A recent report from the U.S. Department of Energy estimates data center load growth has tripled over the past decade and will double or triple by 2028. The department said data centers consumed about 4.4% of total U.S. electricity in 2023 and will consume about 6.7% to 12% of total U.S. electricity by 2028.
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Couple that with rising demand for the electrification of transportation and other parts of the economy and you’ve got a recipe for rising electricity demand at a time when governments around the world are looking to transition away from fossil fuels.
That’s the basic long-term investment case for nuclear power, which can create stable electricity without emitting greenhouse gases: It’s increasing in demand as governments look for low-carbon, secure sources of energy. But while the future looks bright, short-term geopolitics are creating a cloud of uncertainty over the market.
“The central source of uncertainty has been the frequent changes and delays in the Trump administration’s tariff policies, which have distracted utilities from normal procurement activities,” Jacob White, ETF product manager at Sprott Asset Management, which offers uranium funds, said in a recent blog post.
But that uncertainty may clear up relatively quickly.
“It looks unlikely that uranium tariffs will last for long,” says Igor Isaev, head of the Analytics Center at European broker Mind Money. “As long as there is a shortage of energy and consumption is growing at rates greater than gas and green energy can satisfy, uranium will be in demand and attractive for investment.”
The uncertainty has helped pressure prices for uranium, a key part of the nuclear fuel supply chain. This isn’t great for companies that mine the metal, but it may also provide an entry point for buy-and-hold investors who think the metal will rally.
“At about $65 per pound, uranium’s current spot price weakness presents a potentially attractive entry opportunity for investors who can weather near-term turbulence,” White says.
That brings us back to the longer-term view.
“Nuclear energy is increasingly looking like an alternative energy source for electricity in the long run,” says Sankar Sharma, CEO of investing education website RiskRewardReturn.com. “With AI companies demanding more green and sustainable energy, nuclear energy appears to be the best alternative.”
Here are some nuclear energy stocks and funds to consider, with their one-year total return as of March 13:
| Stock | 1-Year Performance |
| Cameco Corp. (ticker: CCJ) | +6.0% |
| Centrus Energy Corp. (LEU) | +86.1% |
| NuScale Power Corp. (SMR) | +114.8% |
| VanEck Uranium and Nuclear ETF (NLR) | +4.0% |
| Sprott Physical Uranium Trust (OTC: SRUUF) | -29.4%* |
*10-year annualized total daily return is 12.3%.
Cameco Corp. (CCJ)
Uranium, the linchpin of the nuclear fuel cycle, 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.
In contrast, Cameco is the world’s second-biggest miner of uranium, which means the company is less risky than exploration companies that aren’t yet in production.
Cameco has investments across the nuclear fuel cycle, including ownership interests in a nuclear technology equipment manufacturer and a laser uranium enrichment technology company. So, the company is benefiting from robust uranium supply deals and rising demand.
Like other mining companies, Cameco is subject to price movements of the commodity it produces, which can be volatile.
Investors who are interested in the uranium mining sector but 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.
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), according to the World Nuclear Association.
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.
Although the company has lost money amid ongoing research and development, NuScale is progressing toward commercialization with cost-saving measures, says Siddhant Masson, CEO of investment research platform company Wokelo AI.
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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.
The fund includes utilities, which can give it 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.
Last year, 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.
Sprott Physical Uranium Trust (OTC: SRUUF)
Investors who want to express a view on the price of uranium itself without having to do it through mining companies can turn to this fund. The trust invests most of its assets in uranium in the form of triuranium octoxide (U3O8) and is the world’s biggest physical uranium fund.
In a market where much of the trading happens between private parties, the fund offers transparency.
“Nuclear energy, especially uranium, has played a key role among the renewable energy sources due to its efficiency, sustainability and lower carbon footprint than fossil fuel sources like coal, oil and gas,” Sharma says.
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5 Best Nuclear Energy Stocks and ETFs to Buy Now originally appeared on usnews.com
Update 03/14/25: This story was previously published at an earlier date and has been updated with new information.
