Uranium stocks could have another explosive few years ahead.
For one, global uranium demand is expected to soar about 28% by 2030, as nuclear power gains momentum, according to The World Nuclear Association (WNA). That’s all thanks to the global push for energy security, and for the massive, growing needs of artificial intelligence data centers. In fact, as the demand for artificial intelligence grows, tech giants are turning to nuclear power to fuel their energy-intensive data centers.
Microsoft, for example, recently signed a power purchase agreement with Constellation Energy. That’s because Microsoft needs extra power to run the servers at its Azure business unit, and thinks nuclear might be the best way to produce that power. Alphabet and Amazon are looking to use nuclear power for their data centers. Alphabet partnered with Kairos Power to open small modular nuclear reactors.
Two, “After 2030, output from existing mines is forecast to halve, creating a pressing need for new mines and restarts of idle operations. With it taking 10 to 20 years to develop new uranium projects, the association stressed the importance of accelerated investment now to avoid disruptions,” as noted by Mining.com.
And three, the Trump Administration just expanded its critical minerals list to include uranium in an effort to strengthen domestic supply and reduce reliance on foreign sources. As noted by Investing News, “The designation of uranium recognizes its strategic importance in powering commercial nuclear reactors, fueling US Navy submarines and supporting defense applications. Currently, the United States imports over 95 percent of its uranium, a dependence that policymakers view as a critical national security concern.”
All of which could serve as a powerful catalyst for uranium stocks, like Cameco (CCJ), Denison Mines (DNN), and Oklo (OKLO). But if you want greater exposure at a lower cost, look at exchange-traded funds (ETFs), such as:
Global X Uranium ETF (SYM: URA)
With an expense ratio of 0.69%, the oversold Global X Uranium ETF (URA) provides investors access to a broad range of companies involved in uranium mining and the production of nuclear components, including those in extraction, refining, exploration, or manufacturing of equipment for the uranium and nuclear industries, holds about 50 related uranium stocks.
That includes Cameco, NexGen Energy, Uranium Energy, Paladin Energy, Denison Mines, and NuScale Power to name a few. At the moment, the URA ETF trades at $51.72. We’d like to see it trade closer to $60 near term.
Sprott Uranium Miners (SYM: URNM)
With an expense ratio of 0.75%, the URNM ETF invests in uranium miners and physical uranium. Some of its top holdings include Cameco Corp., Paladin Energy, Denison Mines, Uranium Energy Corp., Deep Yellow Ltd., Yellow Cake PLC, and Ur-Energy, to name just a few. The URNM ETF now trades at $67.60. We’d like to see it closer to $75 near term.
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Written by Ian Cooper